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Mortgage rates slipped back after having been on the rise for just the 2^nd time in 7-weeks in the previous week.

In the week ending 19^th August, 30-year fixed rates fell by 1 basis point to 2.86%. Mortgage rates had jumped by 10 basis points in the week prior.

30-year mortgage rates have risen just once beyond the 3% mark Since 21^st April.

Compared to this time last year, 30-year fixed rates were down by 13 basis points.

30-year fixed rates were still down by 208 basis points since November 2018’s last peak of 4.94%.

Economic Data from the Week

It was a relatively busy first half of the week on the economic data front. Key stats from the U.S included manufacturing numbers for NY State, industrial production, and retail sales figures.

The stats were skewed to the negative, with retail sales falling by 1.0% in July versus a forecasted 0.3% decline. In June, retail sales had risen by 0.7%.

In August, the NY Empire State Manufacturing Index slid from 43.0 to 18.3% versus a forecasted fall to 29.0.

On the monetary policy front, FOMC meeting minutes revealed increased debate over a tapering to the asset purchasing program. Following impressive NFP payrolls, FOMC member chatter in the week weighed on riskier assets, with members talking of a need make a move.

From elsewhere, economic data from China added to concerns over the economic recovery at the start of the week.

Fixed asset investments rose by 6.4% in July, year-on-year, compared with 8.3% in June. Retail sales increased by 8.5% compared with 12.6% in June.

Freddie Mac Rates

The weekly average rates for new mortgages as of 19^th August were quoted by Freddie Mac to be:

• 30-year fixed rates fell by 1 basis points to 2.86% in the week. This time last year, rates had stood at 2.99%. The average fee remained unchanged at 0.7 points.

• 15-year fixed increased by 1 basis point 2.16% in the week. Rates were down by 38 basis points from 2.54% a year ago. The average fee fell from 0.7 points to 0.6 points.

• 5-year fixed rates declined by 1 basis point to 2.43%. Rates were down by 48 points from 2.91% a year ago. The average fee held steady at 0.3 points.

According to Freddie Mac,

• Mortgage rates stayed relatively flat in the week. Housing is in a similar phase of the economic cycle as many other consumer goods.

• While there is strong latent demand, low supply has caused prices to rise as shortages restrict the mount of sales activity that would otherwise occur.

Mortgage Bankers’ Association Rates

For the week ending 13^th August, the rates were:

• Average interest rates for 30-year fixed with conforming loan balances increased from 2.99% to 3.06. Points increased from 0.30 to 0.34 (incl. origination fee) for 80% LTV loans.

• Average 30-year fixed mortgage rates backed by FHA increased from 3.06% to 3.15%. Points rose from 0.27 to 0.31 (incl. origination fee) for 80% LTV loans.

• Average 30-year rates for jumbo loan balances increased from 3.15% to 3.19%. Points decreased from 0.29 to 0.26 (incl. origination fee) for 80% LTV loans.