Following last week’s pause, the upward trend in mortgage rates resumed in the week ending 25th October, with 30-year fixed gaining 1 basis point to 4.86%
A relatively busy week on the data front contributed to the uptick in mortgage rates, with durable goods orders rising by 0.8% in September and the private sector seeing an increase in activity across both manufacturing and service sectors, driven by domestic demand.
On the downside for the housing sector, there was more bad news with new home sales sliding by 5.5% in September, reversing the previous month’s 3% gain, adding further pressure on a sector that is not only struggling with limited inventories, but also a rising mortgage rate environment as the FED looks to extend beyond normalization on the policy front.
The uptick in mortgage rates came in spite of a sell-off across the global equity markets that saw the Dow down 1.81% through to Thursday’s close, with the S&P500 down 2.25%, the losses coming even after a solid bounce on Thursday that saw the pair gains 1.63% and 1.41% respectively, driven by positive earnings results. Thursday’s equity market recovery provided the uptick in Treasury yields to give mortgage rates a minor gain, the slide in new home sales and stock market volatility having pinned back yields earlier in the week.
Freddie Mac weekly average rates for new mortgages as of 25th October were quoted to be:
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30-year fixed rate loan increased from 4.85% to 4.86% in the week, while up from 3.84% a year ago. The average fee remained unchanged at 0.5 points.
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15-year fixed rates remained unchanged at 4.29% in the week, while up from 3.25% from a year ago. The average fee remained unchanged at 0.4 points.
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5-year fixed rates increased from 4.10% to 4.14% in the week and up from last year’s 3.21%. The average fee held steady at 0.3 points.
Mortgage Bankers’ Association Rates for the week ending 19th October were quoted to be:
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Average interest rates for 30-year fixed, backed by the FHA, increased from 4.99% to 5.07%, its highest level since April 2011, with points decreasing from 0.69 to 0.61 (incl. origination fee) for 80% LTV loans.
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Average interest rates for 30-year fixed with conforming loan balances increased from 5.10% to 5.11, its highest level since February 2011, with points easing from 0.55 to 0.52 (incl. origination fee) for 80% LTV loans.
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Average 30-year rates for jumbo loan balances increased from 4.98% to 5.01%, with points decreasing from 0.34 to 0.28 (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, increased by 4.9% in the week ending 19th October following on from the previous week’s 7.1% decline, week-on-week.