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Mortgage rates hit reverse in the week ending 26th September. 30-year fixed rates fell by 9 basis points to 3.64%, partially reversing a 17 basis point surge in the week prior.
The pullback left 30-year rates close to levels last seen in early November of 2016, according to figures released by Freddie Mac.
Compared to this time last year, 30-year fixed rates were down by 108 basis points.
More significantly, 30-year fixed rates are down by 130 basis points since last November’s most recent peak of 4.94%.
Economic Data from the Week
Through the first half of the week, economic data included prelim September private sector PMI numbers, consumer confidence figures, and housing data.
A slight pickup in U.S. private sector activity in September failed to spur the markets, with PMI figures out the Eurozone testing risk sentiment at the start of the week.
U.S consumer confidence figures on Tuesday also weighed, with the CB Consumer Confidence Index falling from 134.3 to 125.1.
On Thursday, 3rd estimate GDP numbers for the 2nd quarter were in line with 2nd estimates, which had a muted impact on yields. The markets brushed aside trade data and the weekly jobless claims figures on Thursday.
Direction ultimately came from geopolitical risk, which was on the rise once more,
A lack of progress on Brexit, impeachment talks in the U.S and mixed sentiment towards the U.S – China trade war pinned back U.S Treasury yields.
Freddie Mac Rates
The weekly average rates for new mortgages as of 26th September were quoted by Freddie Mac to be:
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30-year fixed rates decreased by 9 basis points to 3.64% in the week. Rates were down from 4.72% from a year ago. The average fee increased from 0.5 points to 0.6 points.
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15-year fixed rates fell by 5 basis points to 3.16% in the week. Rates were down from 4.16% from a year ago. The average fee held steady at 0.5 points.
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5-year fixed rates decreased by 11 basis point to 3.38% in the week. Rates were down by 59 basis points from last year’s 3.97%. The average fee remained unchanged at 0.4 points.
According to Freddie Mac, the housing market regained momentum with home sales and construction at or near decade highs. Solid sales and price gains are expected to continue into the fall. Both strong labor market conditions and mortgage rate at sub-4% levels will provide support in the months ahead.
In August, pending home sales rose by 1.6%, reversing most of a 2.5% fall in July, with new home sales surging by 7.1%.
Building permits and housing starts had also impressed in August. Building permits jumped by 7.7%, while housing starts surged by 12.3%.