In the week ending July 1, mortgage rates fell for a second consecutive week.
30-year fixed rates tumbled by 40 basis points, following an 11-basis point decline from the previous week to end the week at 5.3%.
Year-on-year, 30-year fixed rates were up by 240 basis points and up by 36 basis points since November 2018’s previous peak of 4.94%.
Economic Data from the Week
In a shortened week, private sector activity and JOLTs job openings were in focus ahead of June nonfarm payroll numbers on Friday.
The stats eased immediate market concerns of a recession, with labor market conditions and private sector activity showing no signs of weakening.
In June, the all-important ISM Non-Manufacturing PMI slipped from 55.9 to 55.3 versus a forecasted 54.3.
While the ISM number was positive, less hawkish-than-expected FOMC meeting minutes on Wednesday pegged back yields.
The FOMC meeting minutes highlighted the risk of rate hikes having a ‘larger-than-expected effect on economic growth.’ Prior to the minutes, the markets had priced in a 75-basis point rate hike for July. However, the minutes revealed that participants judged a 50 or 75 basis point increase as appropriate.
Freddie Mac Rates
The weekly average rates for new mortgages, as of July 7, 2022, were quoted by Freddie Mac to be:
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30-year fixed rates slumped by 40 basis points to 5.30%. This time last year, rates stood at 2.90%. The average fee fell from 0.9 points to 0.8 points.
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15-year fixed rates slid by 38 basis points to 4.45% in the week. Rates were up by 225 basis points from 2.20% a year ago. The average fee fell from 0.9 points to 0.8 points.
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5-year fixed rates tumbled by 31 basis points to 4.19%. Rates were up by 167 basis points from 2.52% a year ago. The average fee increased from 0.3 points to 0.4 points.
According to Freddie Mac,
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30-year fixed mortgage rates fell by half a percent in the last two weeks, weighed by fears of a recession.
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The pullback delivers minor homebuyer relief.
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A continued slowdown in house price growth, however, stemming from low affordability and an expected economic slowdown, would continue to support a normalization in the housing market.
Mortgage Bankers’ Association Rates
For the week ending July 1, 2022, the rates were:
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Average interest rates for 30-year fixed with conforming loan balances decreased from 5.84% to 5.74%. Points rose from 0.64 to 0.65 (incl. origination fee) for 80% LTV loans.
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Average 30-year fixed mortgage rates backed by FHA fell from 5.62% to 5.60%. Points declined from 1.15 to 0.89 (incl. origination fee) for 80% LTV loans.
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Average 30-year rates for jumbo loan balances decreased from 5.42% to 5.28%. Points increased from 0.28 to 0.44 (incl. origination fee) for 80% LTV loans.