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Mortgage rates fell further back in the week ending 30th January. 30-year rates fell by 9 basis points to 3.51%. In the week ending 23rd January, 30-year rates had fallen by 5 basis points to 3.60%.
The weekly decline left mortgage rates at the lowest level since early September and less than a quarter-point above all-time lows, according to figures released by Freddie Mac.
Compared to this time last year, 30-year fixed rates were down by 95 basis points.
30-year fixed rates were also down by 143 basis points since November 2018’s most recent peak of 4.94%.
Economic Data from the Week
It was a relatively busy week on the economic data front. Key stats included durable goods orders and consumer confidence figures.
A jump in the CB Consumer Confidence Index from 128.2 to 131.6, coupled with a 2.4% rise in durable goods orders, supported yields,
On the negative, however, was a 0.10% fall in core durable goods orders and a widening in the goods trade deficit from $62.99bn to $68.33bn.
Housing sector figures were also disappointing at the end of the year. New home sales fell by 0.4%, with pending home sales sliding by 4.9% in December.
It wasn’t all doom and gloom, however, with house prices on the rise. In November, the S&P/CS HPI Composite – 20 (n.s.a) rose by 2.6% year-on-year. In October, the index had risen by 2.2%.
While the stats provided direction, the FED and market sentiment towards the coronavirus led to an inversion of the 3-month – 10-year yield curve on Wednesday.
FED Chair Powell raised concern over the likely impact of the coronavirus on the global economy. Powell also raised concerns over inflation, which left the door ajar to a rate cut in the coming months.
Freddie Mac Rates
The weekly average rates for new mortgages as of 30th January were quoted by Freddie Mac to be:
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30-year fixed rates decreased by 9 basis points to 3.51% in the week. Rates were down from 4.46% from a year ago. The average fell back from 0.8 points to 0.7 points.
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15-year fixed rates fell by 4 basis points to 3.00% in the week. Rates were down from 3.89% compared with a year ago. The average decreased from 0.8 points to 0.7 points.
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5-year fixed rates declined by 4 basis points to 3.24% in the week. Rates were down by 72 points from last year’s 3.96%. The average fee held steady at 0.3 points.
According to Freddie Mac, mortgage rates fell to their 2nd lowest level in 3-years, driving demand for home buyers and refinancers.
The downside in mortgage rates should see homeowners loosen the purse strings to spend more in the retail sector.