Mortgage rates increased by 4th consecutive week in the week up to 11th March. After an increase of 5 basis points from the previous week; The 30-year fixed interest rate rose by a further 3 basis points to 3.05%.
Compared to this time last year, the 30-year fixed interest rate was 31 basis points lower.
The 30-year fixed rate has also fallen 189 basis points since the last high of 4.94% in November 2018.
Remarkably, however, it was only the second plus 3% week since July last year.
Economic data of the week
It was a relatively quiet first half of the week on the US economic calendar. January’s inflation numbers were in focus earlier this week.
Statistics were negative, with inflationary pressures easing early in the year.
Core annual inflation fell from 1.4% to 1.3%, with core consumer prices rising just 0.1% in January.
Elsewhere, economic data from China impressed as it went into the week to set the tone.
Exports rose 60.6% while imports rose 22.2% in February.
Freddie Mac Awards
The weekly average rates for new mortgages as of Jan.th March were quoted by Freddie Mac be::
According to Freddie Mac,
Mortgage rates rose this week amid the bullish labor market, the continued introduction of vaccinations and the impending additional incentives.
Even if interest rates rise slightly, the real estate market remains healthy for the home market as the spring season begins.
The demand for homebuyers is strong and for homeowners who haven’t refinanced but want to do so, they haven’t missed the opportunity.
Mortgage lender association rates
For the week up to 5th March, the Prices were::
The 30-year average interest rate set on conforming loan balances increased from 3.23% to 3.26%. The points for 80% LTV loans decreased from 0.48 to 0.43 (including origination fee).
The FHA-backed 30-year average fixed mortgage rate increased from 3.19% to 3.20%. The points for 80% LTV loans increased from 0.30 to 0.37 (including origination fee).
The 30-year average jumbo loan balance increased from 3.33% to 3.34%. The points for 80% LTV loans have been increased from 0.41 to 0.50 (including origination fee).
The weekly numbers released by the Mortgage Bankers Association showed that the Market Composite Index, a measure of mortgage loan application volume, declined 1.3% for the week ended of year 5th March. In the previous week the index was up 0.5%.
The refinancing index fell by 5% and was 43% below the previous year’s value. The index had risen 0.1% the week before.
In the week up to 5th In March, the refinancing share of mortgage activity decreased from 67.5% to 64.5%. In the previous week, the share had fallen from 68.5% to 67.5%.
According to the MBA,
The 30-year fixed rate rose to its highest level since July last year and has increased by 40 basis points since the beginning of 2021.
Signs of faster economic growth, an improving labor market, and increased vaccination distribution pushed rates up.
The rise in mortgage rates is further cooling the demand for refinancing applications.
Activity decreased for the fourth time in 5 weeks last week.
For the coming week
It’s again a relatively quiet first half of the week on the US economic calendar. Key statistics include February retail sales and industrial production numbers.
Expect retail sales to be the main driver.
Late last week, a surge in US Treasury yields will continue to put pressure on mortgage rates for the coming week.
This items was originally published on FX Empire