U.S mortgage rates managed to avoid a 6th consecutive weekly rise, with rates easing back by just 1 basis point to 4.71% for the week ending 4th October, according to Freddie Mac’s latest report, leaving mortgage rates just shy of last week’s 7-year high.
In spite of the minor pullback in the week, economic data out of the U.S continue to support the upward trajectory for mortgage rates, with 5% rates unlikely to be far off should momentum in the U.S economy continue, the mid-term elections deliver few shocks and the U.S and China settle their differences.
Economic data released through the week ending 4th October included softer than anticipated core PCE price index figures for August together with September private sector PMI numbers and September’s ADP nonfarm employment change and weekly initial jobless claims numbers that were all skewed to the positive ahead of official government nonfarm payroll and wage growth figures that were released on Friday and will influence next week’s moves.
Outside of the data, FED Chair Powell also contributed to the upward momentum in U.S Treasury yields, with a positive outlook on the economy and hawkish chatter on policy getting a market reaction, while the positive sentiment towards NAFTA’s replacement USMCA was offset by rising tensions between the U.S and China, which has raised question on whether the continued surge in economic activity is as a result of companies looking to avoid fresh tariffs or due to actual demand, business inventory numbers in the coming months likely to tell the story.
Freddie Mac weekly average rates for new mortgages as of 4th October were quoted to be:
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30-year fixed rate loan slipped from 4.72% to 4.71% in the week, while up from 3.85% a year ago. The average fee falling to 0.4 points from the previous week’s 0.5 points.
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15-year fixed rates fell from 4.16% to 4.15% in the week, while up from 3.15% 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 3.97% to 4.01% in the week and up from last year’s 3.18%. The average fee held steady at 0.3 points.
Mortgage Bankers’ Association Rates for the week ending 28th September were quoted to be:
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Average interest rates for 30-year fixed, backed by the FHA, increased from 4.94% to 4.95%, its highest level since May 2011, with points decreasing from 0.83 to 0.80 (incl. origination fee) for 80% LTV loans.
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Average interest rates for 30-year fixed with conforming loan balances eased from 4.97% to 4.96%, just shy of its highest level since April 2011, with points rising from 0.47 to 0.49 (incl. origination fee) for 80% LTV loans..
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Average 30-year rates for jumbo loan balances increased from 4.92% to 4.93%, its highest level since July 2011, with points increasing from 0.30to 0.31 (incl. origination fee) for 80% LTV loans.