Mortgage rates were in flat for a 2^nd consecutive week in the week ending 11^th February. In late January, mortgage rates had fallen for 2 consecutive weeks. 30-year fixed rates held steady at 2.73%.

Compared to this time last year, 30-year fixed rates were down by 74 basis points.

30-year fixed rates were also down by 221 basis points since November 2018’s last peak of 4.94%.

Economic Data from the Week

Through the 1^st half of the week, economic data from the U.S was on the quieter side. Key stats included December’s JOLTs job openings and January inflation figures.

While there was a rise in job openings at the end of the year, inflation softened in January, which was negative for yields.

While the stats were mixed, market sentiment towards the economic outlook to support yields.

Anticipated fiscal stimulus alongside the FED’s assurance of lower for longer continued to fuel the market optimism.

Freddie Mac Rates

The weekly average rates for new mortgages as of 11^th February were quoted by Freddie Mac to be:

• 30-year fixed rates held steady at 2.73% in the week. This time last year, rates had stood at 3.47%. The average fee remained steady at 0.7 points.

• 15-year fixed rates fell by 2 basis points to 2.19% in the week. Rates were down by 78 basis points from 2.97% a year ago. The average fee remained unchanged at 0.6 points.

• 5-year fixed rates rose by 1 basis point 3.79%. Rates were down by 49 points from 3.28% a year ago. The average fee fell from 0.3 to 0.2 points.

According to Freddie Mac,

• While the U.S services sector continues to struggle, the production side of the economy remains strong.

• New COVID-19 cases are receding, which has supported an uptick in U.S Treasury yields.

• Treasury yields have yet to impact mortgage rates, however.

• The residential real estate market remains solid given healthy purchase demand.

• This is in spite of home price growth fueled by inventory shortages that is plaguing the housing sector.

Mortgage Bankers’ Association Rates

For the week ending 5^th February, the rates were:

• Average interest rates for 30-year fixed to conforming loan balances increased from 2.92% to 2.96%. Points increased from 0.32 to 0.36 (incl. origination fee) for 80% LTV loans.

• Average 30-year fixed mortgage rates backed by FHA increased from 2.94% to 2.97%. Points rose from 0.29 to 0.36 (incl. origination fee) for 80% LTV loans.

• Average 30-year rates for jumbo loan balances decreased from 3.12% to 3.11%. Points decreased from 0.32 to 0.29 (incl. origination fee) for 80% LTV loans.

Weekly figures released by the Mortgage Bankers Association showed that the Market Composite Index, which is a measure of mortgage loan application volume, fell by 4.1% in the week ending 5^th February. In the previous week, the index had increased by 8.1%.