In the week ending May 5, mortgage rates rose for the eighth time in nine weeks.
30-year fixed rates jumped 17 basis points to 5.27%. 30-year fixed rates slipped one basis point the previous week.
Over one year, 30-year fixed rates are up 231 basis points.
30-year fixed rates have risen 33 basis points since the last peak in November 2018 at 4.94%.
Economic data of the week
Private sector PMIs and non-farm payrolls were the key statistics for the first half of the week.
Numbers were negative in dollars, with disappointing private sector PMI numbers.
In April, the ISM manufacturing PMI fell from 57.1 to 55.4, with the non-manufacturing PMI dropping from 58.3 to 57.1.
Labor market numbers were also negative in dollars ahead of Friday’s NFP numbers. ADP reported a 247,000 increase in nonfarm payrolls for April, below forecast, and an increase of 479,000 in March.
While the statistics were interesting, the Fed’s monetary policy decision and forward guidance were the main drivers for the week.
On Wednesday, the Fed announced a rate hike of 50 basis points, in line with forecasts. Fed Chairman Powell also sought to calm markets by assuring that 75 basis point hikes would not be on the table.
Freddie Mac Pricing
Average weekly rates for new mortgages, as of May 3, 2022, were quoted by Freddie Mac be:
According to Freddie Mac,
Mortgage rates hit their highest level since 2009 as the upward trend resumed in the first week of May.
House price growth will continue, although the pace of growth is expected to slow due to affordability and inflationary pressures.
Mortgage Bankers Association Rates
For the week ending April 29, 2022, the rates have been:
Average 30-year interest rates fixed with conforming loan balances fell from 5.37% to 5.36%. Points increased from 0.67 to 0.63 (including origination fees) for 80% LTV loans.
Average FHA-backed 30-year fixed mortgage rates fell from 5.29% to 5.27%. Points increased from 0.88 to 0.85 (origination fee included) for 80% LTV loans.
The 30-year average rates for jumbo loan balances fell from 4.89% to 4.92%. Points increased from 0.47 to 0.43 (origination fee included) for 80% LTV loans.
Weekly figures released by the Mortgage Bankers Association showed the Composite Market Index, a measure of mortgage application volume, rose 2.5% in the week ending April 29. The index fell 8.3% the previous week.
The refinancing index rose 0.2% and was 71% lower than the same week a year ago. During the previous week, the index fell by 9%.
The refinancing share of mortgage activity decreased from 35.0% to 33.9% of total applications. The previous week, the share fell from 35.7% to 35.0%.
According to the MBA,
Treasury yields fell slightly last week, although they held near 4-year highs as markets priced in the Fed and its policy plans.
Buying requests increased, a positive sign for the peak of the spring home buying season in the sector.
Low inventory levels and rising house prices remain a negative housing sector for potential buyers.
For the coming week
Inflation is back in the spotlight, with consumer inflation figures expected to spark investor interest on Wednesday.
Another spike in inflation would test support for riskier assets following the Fed’s forecast last week.
FOMC member chatter will also need to be watched, along with trade data and inflation numbers out of China.
On the geopolitical risk front, the war in Ukraine will remain the area of interest.
This article originally appeared on FX Empire