Rates Move Back Up Over 7%

Homebuyers only enjoyed one week of sub-7% rates before the 30-year mortgage moved above that mark again. Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 7.03%, up from the week prior’s 6.94%. A year ago at this time, the 30-year FRM averaged 6.79%. The 15-year also rose from 6.24% to 6.36%. A year ago at this time, it was 6.18%. Rates dipped below 7% the week prior for the first time in more than a month but reversed course on shifting market dynamics. “More hawkish commentary about inflation and tepid demand for longer-dated Treasury auctions caused market yields to rise across the board. This reality, as well as economic signals that have moved sideways over the…

Rates Cool For Second Week

Average mortgage rates declined for a second week as inflation moderated in the Fed’s preferred inflation indicator. Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 7.02%, down from the week prior’s 7.09%. A year ago at this time, the 30-year FRM averaged 6.39%. The 15-year also fell, down from last week’s 6.38% to 6.28%. A year ago at this time it was 5.75%. “Mortgage rates decreased for the second consecutive week,” said Sam Khater, Freddie Mac’s Chief Economist. “Given the news that inflation eased slightly, the 10-year Treasury yield dipped, leading to lower mortgage rates. The decrease in rates, albeit small, may provide a bit more wiggle room in the budgets of prospective homebuyers.” Even a…

Rates Fall 11 BPS, Applications Rally

Mortgage applications rallied last week as a slowing jobs market and positive indications from the Central Bank led to rates plummeting.  The Mortgage Bankers Association’s weekly survey shows that the adjusted Market Composite Index — a measure of mortgage loan application volume — rose by 2.6%, reversing last week’s 2.3% dip. Adjusted purchase applications increased by 2%, while the unadjusted index was up 2% and 17% lower YOY.  Rates declined for the first time since March, falling a full 11 bps to 7.18%. FHA loans drove the upward push, jumping 5%, as their rates plummeted to 6.92%. It’s been weeks since these rates were last below 7%. “First-time homebuyers account for roughly half of purchase loans, and the government lending…

Inflation Climbed In March But Showed Signs Of Cooling

Inflation continued its upward march last month but showed signs of cooling, according to new data from the Bureau of Labor Statistics. The Consumer Price Index rose 5% YOY in March, down from 6% in February. Month-over-month, inflation was up 0.1% on a seasonally adjusted basis, compared to 0.4% in February. The core index, which measures everything but volatile food and fuel costs, ticked up by 0.1% to 5.6% YOY. Though the increase is slight, it’s the first YOY acceleration since September. “This is obviously a short-term setback for the Fed. However, inflation was never expected to decelerate in a straight line,” Tiffany Wilding, managing director and North American economist at PIMCO, wrote in a note. “[N]otwithstanding this report we…

Rates Move Closer To 7% After Bleak Powell Comments

Mortgage rates moved closer to 7% after bleak news from Federal Reserve Chair Jerome Powell this week. Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage rate averaged 6.73%, up from 6.65% the week prior. A year ago at this time, the 30-year FRM averaged 3.85%. The 15-year fixed-rate mortgage rose from 5.89% to 5.95%. A year ago, it averaged 3.09%. “Mortgage rates continue their upward trajectory as the Federal Reserve signals a more aggressive stance on monetary policy,” said Sam Khater, Freddie Mac’s Chief Economist.  “Overall, consumers are spending in sectors that are not interest rate sensitive, such as travel and dining out. However, rate-sensitive sectors, such as housing, continue to be adversely affected. As a result,…

Loan Apps Continue Downward Spiral

Mortgage loan application volume fell another 2% last week, according to the Mortgage Bankers Association’s weekly survey. Interest rates rose to 6.81%, their highest point since 2006. The adjusted Market Composite Index, a measure of mortgage loan application volume, dropped by 2%. The adjusted purchase index fell 2%, while the unadjusted purchase index decreased 2% and was 39% lower YOY. The refinance index dropped by 2% and was 86% lower than the same time last year. Refis made up 29% of total applications. The ARM share of activity dipped slightly from last week as the 5/1 interest rate jumped 20 basis points from 5.36% to 5.56%. “The ARM share of applications remained quite high at 11.7%– just below last week’s…

Rates Exceed 6%, Applications Tumble

Mortgage loan application volume fell last week as mortgage rates topped 6% for the first time since 2008, nearly doubling year over year. The Mortgage Bankers Association’s weekly survey shows that the adjusted Market Composite Index, a measure of mortgage loan application volume, decreased by 1.2%. The adjusted purchase index rose 0.2%, while the unadjusted purchase index dropped 12% and was 29% lower YOY. The refinance index dropped by 4% and was 83% lower than the same time last year. Refis made up 30.2% of total applications. “Higher mortgage rates have pushed refinance activity down more than 80 percent from last year and have contributed to more homebuyers staying on the sidelines. Government loans, which tend to be favored by…

Rate Cuts Could Come This Year If Fed Can’t Get Inflation Under Control, Analysts Suggest

With the July Federal Open Markets Committee meeting fast approaching, speculation about another substantial rate hike is running rampant. After June’s historic 0.75 percentage point interest rate hike, the third hike this year and the largest since 1994, analysts are watching the Fed closely. Recession fears are rapidly growing, with 70% of economists expecting it by 2023. But Federal Reserve Chairman Jerome Powell said he was more concerned about high inflation continuing than about the possibility of rising interest rates causing a recession. “Is there a risk we would go too far? Certainly there’s a risk,” Powell said this week. “The bigger mistake to make, let’s put it that way, would be to fail to restore price stability.” Some experts…