Mortgage rates rose to 2na consecutive week, with 30-year fixed rates jumping 14 basis points to 2.79%.
Compared to last year, 30-year fixed rates fell 86 basis points.
The 30-year fixed rates also fell by 215 basis points since the last peak in November 2018 of 4.94%.
Economic data of the week
Through the 1st By mid-week, US economic data was on the lighter side. Key statistics included JOLT job openings and inflation figures.
Although JOLT’s job vacancies decreased in November, the core annual inflation remained stable at 1.6%. The statistics had a quiet impact on the week, however.
From Capitol Hill, the planned launch of a sizeable stimulus package and ongoing vaccinations supported more risky assets.
Freddie Mac prices
Average weekly rates for new mortgages from 14º January was quoted by Freddie Mac to be:
- 30-year fixed rates jumped 14 basis points to 2.79% for the week. At this time, last year, rates were 3.65%. The average tariff remained stable at 0.7 points.
- 15-year fixed rates increased 7 basis points to 2.23% for the week. Rates fell 86 basis points from 3.09% a year ago. The average tariff rose from 0.6 points to 0.7 points.
- 5-year fixed rates increased by 37 basis points to 3.12%. Rates fell 27 points from 3.39% a year ago. The average tariff rose from 0.3 points to 0.4 points.
According to Freddie Mac,
- An increase in US Treasury yields earlier in the year pushed mortgage rates upward for the week.
- While rates are expected to rise modestly in 2021, they will remain unmistakably low, supporting buyer demand and mortgage refinancing.
- Borrowers are smart to take advantage of these low rates now and will benefit from it.
Mortgage bankers’ association fees
For the week ending 8º January, the quotes They were:
- Average interest rates for fixed-term and 30-year loan balances increased from 2.86% to 2.88%. The points decreased from 0.35 to 0.33 (including origination fee) for LTV loans at 80%.
- Average FHA-guaranteed 30-year fixed mortgage rates increased from 2.90% to 2.93%. Points dropped from 0.33 to 0.32 (including 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 16.7% in the week ending 8º January. In the previous 2 weeks, the Index had fallen 4.2%.
The Refinance Index jumped 20% and was 93% higher than in the same week last year. Over 2 weeks to 1st January, the index had fallen 6%.
In the week ending 8º In January, the mortgage refinancing share increased from 73.5% of total investments to 74.8%.
According to the MBA,
- Expanding refinancing activity in the first full week of 2021 has led mortgage applications to reach their highest level since March 2020.
- The expectation of additional fiscal stimulus and the introduction of vaccines improved the economic outlook. This led to a jump in Treasury yields that drove mortgage rates north.
- Even with the increase in mortgage rates, refinancing did not slow down at the beginning of the year.
- Sustained demand for housing continued to support the growth of purchases, with activity growing almost 10% over the previous year.
For the next week
It is a particularly quiet first half of the week on the US economic calendar. There are no relevant statistics from the United States to provide guidance on US Treasury bills and mortgage rates.
The lack of statistics will leave earnings in the hands of COVID-19 news, Capitol talks and economic data from the previous week.
Disappointing unemployment claims and last week’s retail sales figures will set the tone for the week.
In the second, 4º China’s GDP figures for the quarter will also influence.
Ultimately, however, with the details of the US stimulus package now available, news from COVID-19 will remain a key factor.