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Mortgage rates were on the rise for a 2^nd consecutive week to mark the 2^nd rise in 4 weeks.

30-year fixed rates increased by 3 basis points to 2.99% in the week ending 20^th August.

Compared to this time last year, 30-year fixed rates were down by 56 basis points.

30-year fixed rates were also down by 195 basis points since November 2018’s most recent peak of 4.94%.

Economic Data from the Week

Economic data was on the lighter side through the 1^st half of the week.

Key stats included August’s NY Empire State and the Philly FED Manufacturing Index numbers for August and the weekly jobless claims.

The stats were on the negative side, with manufacturing sector activity seeing slower growth and initial jobless claims rising back up to 1m.

A lack of progress on the U.S COVID-19 stimulus package was also negative for yields. There was also rising tension between the U.S and China to consider.

On the monetary policy front, the FED delivered a gloomy economic outlook mid-week, which failed to weigh on mortgage rates.

Freddie Mac Rates

The weekly average rates for new mortgages as of 20^th August were quoted by Freddie Mac to be:

• 30-year fixed rates increased by 3 basis points to 2.99% in the week. Rates were down from 3.56% from a year ago. The average fee remained unchanged at 0.8 points.

• 15-year fixed rates rose by 8 basis points to 2.54% in the week. Year-on-year, rates were down from 3.03%. The average fee fell from 0.8 points to 0.7 points.

• 5-year fixed rates increased from 2.90% to 2.91% in the week. Rates were down by 41 points from last year’s 3.32%. The average fee fell from 0.4 points to 0.3 points.

According to Freddie Mac,

• Homebuyer demand continues to accelerate, ultimately delivering support to an otherwise stagnated economy.

• The surge in sales led to a rapid increase in demand for remodeling and home furnishings as consumers look to renovate while adjusting to home life during COVID-19.

Mortgage Bankers’ Association Rates

For the week ending 14^th August, rates were quoted to be:

• Average interest rates for 30-year fixed, backed by the FHA, declined from 3.23% to 3.16%. Points decreased from 0.33 to 0.27 (incl. origination fee) for 80% LTV loans.

• Average interest rates for 30-year fixed with conforming loan balances increased from 3.06% to 3.13%. Points fell rose 0.33 to 0.36 (incl. origination fee) for 80% LTV loans.

• Average 30-year rates for jumbo loan balances increased from 3.40% to 3.41. Points increased from 0.31 to 0.35 (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, decreased by 3.3% in the week ending 14^th August. In the week prior, the index had increased by 6.8%.