Mortgage rates have dropped to 16º record low of the year after falling by 4 basis points to 15º record low the week before.
Compared to last year, 30-year fixed rates fell by 108 basis points.
The 30-year fixed rates have also dropped 228 basis points since the most recent peak in November 2018 of 4.94%.
Economic data of the week
Economic data was on the busiest side in the 1st half the week.
November personal spending, inflation and durable goods orders, along with consumer confidence and unemployment insurance claim numbers were in focus.
It was a mix of economic data. Consumer confidence declined in December, while initial claims for unemployment benefits dropped from 892,000 to 805,000.
The annual core rate of inflation remained at 1.4%, while personal spending fell more than expected by 0.4%.
Orders for durable goods and basic durable goods continued to increase, however, after the October jump, supporting more risky assets.
From Capitol Hill, progress towards a COVID-19 stimulus package has been positive for risk, while ongoing concerns about COVID-19 and news of new strains tested support the week.
At the end of the week, U.S. President Trump refused to sign the COVID-19 stimulus package. Hopes for a better package supported riskier assets in the middle of the week, before news of lawmakers refusing Trump’s demands hit the wire.
Freddie Mac prices
Average weekly rates for new mortgages from 24º December was quoted by Freddie Mac to be:
According to Freddie Mac,
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The housing market is expected to end the year strong, as low mortgage rates continue to fuel demand from buyers.
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Refinancing activity also remains robust with mortgage rates at historic lows.
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Looking at 2021, Freddie Mac expects rates to remain stable. A major driver in the short term, however, will be the trajectory of the pandemic COVID-19 and the execution of the vaccine.
Mortgage bankers’ association fees
For the week ending 18º December, the quotes They were:
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Average interest rates for balances of 30-year fixed and non-performing loans increased from 2.85% to 2.86%. The points remained unchanged at 0.33 (incl. Origination fee) for LTV loans at 80%.
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Average interest rates for 30 fixed years, guaranteed by the FHA, decreased from 2.96% to 2.90%. The points fell from 0.42 to 0.32 (including origination fee) for LTV loans at 80%.
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The average 30-year rates for jumbo loan balances decreased from 3.12% to 3.10%. The points decreased from 0.33 to 0.29 (incl. Origination fee) for LTV loans at 80%.
The weekly figures released by the Mortgage Bankers Association showed that the Market Composite Index, which is a measure of the volume of mortgage loan applications, increased by 0.8% in the week ending 18º December. In the previous week, the Index had risen 1.1%.
The Refinance Index increased 4% and was 124% higher than in the same week of the previous year. In the previous week, the index had risen 1%.
The refinancing share of mortgage activity increased from 72.7 to 74.8%. In the previous week, participation had increased from 72.0% to 72.7%.
According to the MBA,
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Mortgage rates are closing the year at record lows, with the 30-year fixed rate – 2.86% – a percentage point below the previous year.
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Purchase apps have dropped to 2na time in 3 weeks, although it remained 26% higher than in the same week of the previous year.
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The average loan balance reached another record.
Numbers for the week ending 25º December and 1st January will be available on 6º January 2021.
For the next week
It is a relatively quiet 1st half a week shortened in the US economic calendar.
Key statistics include November business data and Chicago PMI December numbers. We don’t expect much influence from the statistics, however.
COVID-19 news updates and market sentiment towards the COVID-19 stimulus package will likely continue to be the main motivators.
This article was originally posted on FX Empire