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In the week ending June 9, mortgage rates rose for the first time in four weeks.
30-year fixed rates jumped by 14 basis points to 5.23%. 30-year fixed rates had slipped by one basis point in the week prior.
Year-on-year, 30-year fixed rates were up by 227 basis points while down by seven basis points from the May 11 peak of 5.30%.
Economic Data from the Week
It was a particularly quiet first half of the week on the economic data front. With stats limited to US trade data, market jitters over inflation and the Fed’s interest rate path returned.
Rising crude oil prices added to the market angst over inflation, driving US mortgage rates higher.
For US mortgage rates, May’s nonfarm payroll figures supported the sharp rise in rates.
Freddie Mac Rates
The weekly average rates for new mortgages, as of June 9, 2022, were quoted by Freddie Mac to be:
According to Freddie Mac,
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Mortgage rates bounced back ahead of US inflation figures and in response to better-than-expected economic data.
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The jump in rates weighed on housing demand, with purchase activity taking another hit.
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A rising supply of homes for sale and weaker demand will cause a deceleration in price growth, delivering much-needed home-buyer relief.
Mortgage Bankers’ Association Rates
For the week ending June 3, 2022, the rates were:
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Average interest rates for 30-year fixed with conforming loan balances increased from 5.33% to 5.40%. Points rose from 0.51 to 0.60 (incl. origination fee) for 80% LTV loans.
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Average 30-year fixed mortgage rates backed by FHA increased from 5.20% to 5.30%. Points rose from 0.69 to 0.79 (incl. origination fee) for 80% LTV loans.
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Average 30-year rates for jumbo loan balances increased from 4.93% to 4.99%. Points rose from 0.41 to 0.44 (incl. origination fee) for 80% LTV loans.
Weekly figures released by the Mortgage Bankers Association showed that the Market Composite Index, a measure of mortgage loan application volume, decreased by 6.5%. The Index fell by 2.3% in the week prior.
The Refinance Index declined by 6% and was 75% lower than the same week one year ago. In the previous week, the Index fell by 5%.
The refinance share of mortgage activity increased from 31.5% to 32.2%. In the previous week, the share decreased from 32.3% to 31.5%.
According to the MBA,
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Weakness in purchase and refinance applications weighed on the market index, which fell to its lowest level in 22 years.
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While lower than four weeks ago, 30-year fixed rates continued to weigh on refinance activity.
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Low housing inventory and rising mortgage rates have adversely affected the purchase market, impacting prospective first-time buyers.
For the week ahead
It is a big week ahead for the global financial markets. On Wednesday, the Fed delivers its June monetary policy decision.
While the interest rate decision is the key, the FOMC projections and the Fed’s forward guidance on rate hikes for the coming months will also be material.
On the economic data front, US wholesale inflation and retail sales figures on Tuesday and Wednesday will influence yields.
For mortgage rates, however, last Friday’s US inflation figures will likely place further upward pressure on rates.
This article was originally posted on FX Empire
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