Mortgage rates drop for third week in a row and return to levels below 3%

Mortgage rates fell for the third week in a row in the week ending 22nd April. After falling 9 basis points from the previous week, fixed 30-year rates fell 7 basis points to 2.97%.

Compared to the same period last year, fixed 30-year rates fell 36 basis points.

Fixed 30-year rates were still down 197 basis points since the last peak in November 2018 at 4.94%.

In particular, mortgage rates have fallen below the 3% mark.

Economic data of the week

The first half of the week was quiet on the US economic calendar.

There were no major statistics from the United States to influence US Treasury yields and mortgage rates during the week.

While there are no statistics, an increase in new cases of COVID-19 tested support for riskier assets globally during the week.

Freddie Mac Pricing

Average weekly rates for new mortgages at 22nd April was cited by Freddie mac to be:

According to Freddie Mac,

  • Falling mortgage rates are good news for homeowners who are still looking to take advantage of the very low interest rate environment.

  • Freddie Mac’s research suggests that low-income homeowners and minority homeowners are less likely to enter the refinance market.

  • Low and falling mortgage rates offer these homeowners the opportunity to reduce their monthly payments and improve their financial situation.

Mortgage Bankers Association rate

For the week ending 16the April, the rates have been:

  • The 30-year average interest rates on compliant loan balances fell from 3.27% to 3.20%. Points increased from 0.33 to 0.36 (including set-up fees) for 80% LTV loans.

  • The 30-year average fixed mortgage rates guaranteed by the FHA fell from 3.24% to 3.15%. Points increased from 0.40 to 0.31 (including set-up fees) for 80% LTV loans.

  • The 30-year average rates for jumbo loan balances fell from 3.35% to 3.34%. Points increased from 0.34 to 0.29 (including set-up fees) for 80% LTV loans.

Weekly figures released by the Mortgage Bankers Association showed the Composite Market Index, which is a measure of mortgage application volume, rose 8.6% in the week ending 16e April. During the previous week, the index had fallen 3.7%.

The refinancing index jumped 10.0% and was 23% lower than the same week a year ago. The index had fallen 5.0% the week before.

In the week ending 16e In April, the refinancing share of mortgage activity fell from 59.2% to 60.0%. During the previous week, the share had fallen from 60.3% to 59.2%.

According to the MBA,

  • Mortgage rates fell to their lowest levels in about 2 months, leading to a surge in refinancing activity.

  • In the previous six weeks, refinancing activity was down.

  • Borrowers have acted on lowering rates for most types of loans.

  • The housing market in the spring was also boosted by lower rates. Purchase requests increased in response.

  • MBA expects the buying market to remain strong, with the labor market recovering and favorable demographics fueling demand for short-term housing.

For the coming week

It’s a calm first half of a week on the US economic calendar. Major orders for durable goods and durable goods are the focus, as are consumer confidence figures.

Expect basic durable goods and consumer confidence to have the biggest impact on returns.

In the middle of the week, the Fed delivers its April monetary policy decision. As the markets expect the Fed to stick to its policy, rate reporting will be the main driver.

This article originally appeared on FX Empire

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