In the week ending 17and In March, mortgage rates hit levels of 4% for the first time since 2019.
30-year fixed rates jumped 31 basis points to 4.16%. 30-year fixed rates had risen 9 basis points the previous week.
Over one year, 30-year fixed rates are up 107 basis points.
30-year fixed rates were still down 78 basis points since the last peak in November 2018 at 4.94%.
Economic data of the week
During the first half of the week, wholesale price inflation and retail sales were the main statistics. The figures were negative in dollars.
The core producer price index rose 0.2% in February, lower than a 1.0% rise in January.
More importantly, retail sales were also disappointing. Core retail sales rose just 0.2% as retail sales rose 0.3% in February. Both had seen marked increases in the previous month.
While the data disappointed, a Fed rate hike and hawkish interest rate projections brought mortgage rates down to 4%. Hopes of a ceasefire in Ukraine and economic stimulus from Beijing supported demand for riskier assets, driving US Treasury yields further higher.
Freddie Mac Pricing
Average weekly rates for new mortgages, as of 17and March, were quoted by Freddie Mac to be:
- 30-year fixed rates jumped 31 basis points to 4.16% in the week. This time last year, rates stood at 3.09%. The average fee remained unchanged at 0.8 points.
- 15-year fixed rates jumped 30 basis points to 3.39% in the week. Rates rose 99 basis points from 2.40% a year ago. The average fee remained unchanged at 0.8 points.
- 5-year fixed rates rose 22 basis points to 3.19%. Rates rose 40 basis points from 2.79% a year ago. The average price fell from 0.3 point to 0.2 point.
According to Freddie Mac,
- Mortgage rates topped 4% for the first time since May 2019.
- The FED raises short-term rates and forecasts further hikes for further increases in mortgage rates.
- While housing demand has moderated, low inventories are keeping the housing sector competitive, pointing to further increases in house prices.
Mortgage Bankers Association Rates
For the week ending 11and March, the rates were:
- Average 30-year interest rates fixed with conforming loan balances fell from 4.09% to 4.27%. Points increased from 0.44 to 0.54 (origination fee included) for 80% LTV loans.
- Average FHA-backed 30-year fixed mortgage rates fell from 4.12% to 4.23%. Points increased from 0.73 to 0.62 (origination fee included) for 80% LTV loans.
- Average 30-year rates for jumbo loan balances fell from 3.79% to 4.02%. Points increased from 0.39 to 0.37 (origination fee included) for 80% LTV loans.
Weekly figures released by the Mortgage Bankers Association showed the Composite Market Index, a measure of the volume of mortgage applications, fell 1.2% in the week ending 11and March. The index had risen 8.5% the previous week.
The refinancing index fell 3% and was 49% lower than the same week a year ago. The previous week, the index had risen by 9%.
The refinancing share of mortgage activity decreased from 49.5% to 48.4%. The previous week, the share fell from 49.9% to 49.5%.
According to the MBA,
- Mortgage rates continue to be volatile due to high uncertainty surrounding Fed policy and the war in Ukraine.
- Investors are considering the impacts of rapidly rising inflation in the United States and globally versus the possible slowing of growth due to supply chain disruption.
- The 30-year fixed mortgage rate rose to 4.27%, the highest since May 2019.
For the coming week
It’s been a particularly quiet start to the week, with no major US statistics for the markets to consider. Although there are no statistics, Fed Chairman Powell is scheduled to speak on Monday and Wednesday. Expect any talk of monetary policy to influence Treasury yields.
Outside of the economic calendar, updates on Russia and Ukraine will also continue to dictate the direction of US Treasuries.