U.S mortgage rates took a pause, following the previous week’s jump in mortgage rates to the highest level since April 2011, with 30-year fixed mortgage rates easing back by just 5 basis points to 4.85% in the week ending 18th October, according to Freddie Mac’s latest weekly report.
Key stats through the week were mixed, better than expected manufacturing data out of NY State and Philly easing concerns of a possible near-term slowdown in the U.S economy going into the 4th quarter, with September industrial production numbers also holding firm, while housing sector data continued to raise red flags, alongside weaker than expected retail sales figures.
While the numbers were ultimately skewed to the negative for yields, the FOMC meeting minutes released on Wednesday provided an uptick in 10-year Treasury yields, with the minutes revealing a more hawkish than anticipated FED that may ultimately move beyond neutral on rates to pin back the U.S economy from overheating.
For prospective homebuyers, the good news was the weaker housing sector numbers, with existing home sales sliding 3.4% in September, following a 0.2% fall in August, the slide to a 3-year low expected to put further pressure on U.S house prices that have seen price growth deceleration and in certain states decline.
A continued rise in mortgage rates and fall in rental rates amidst the current labour market environment could have a material impact on house prices should supply rise further, though looking at the latest housing starts and building permit figures for September, a 5.3% slide in housing starts will continue to raise questions over supply, with September building permits also seeing red off the back of August’s 5.7% slide.
Freddie Mac weekly average rates for new mortgages as of 18th October were quoted to be:
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30-year fixed rate loan eased from 4.90% to 4.85% in the week, while up from 3.82% a year ago. The average fee remained unchanged at 0.5 points.
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15-year fixed rates slipped from 4.29% to 4.26% in the week, while up from 3.19% from a year ago. The average fee fell from 0.5 points to 0.4 points.
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5-year fixed rates increased from 4.07% to 4.10% in the week and up from last year’s 3.17%. The average fee held steady at 0.3 points.
Mortgage Bankers’ Association Rates for the week ending 12th October were quoted to be:
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Average interest rates for 30-year fixed, backed by the FHA, increased from 4.98% to 4.99%, its highest level since April 2011, with points increasing from 0.63 to 0.69 (incl. origination fee) for 80% LTV loans.
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Average interest rates for 30-year fixed with conforming loan balances increased from 5.05% to 5.10%, its highest level since February 2011, with points rising from 0.51 to 0.55 (incl. origination fee) for 80% LTV loans.
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Average 30-year rates for jumbo loan balances decreased from 4.99% to 4.98%, with points decreasing from 0.35 to 0.34 (incl. origination fee) for 80% LTV loans.