Economy US mortgage rates are falling again, and purchase orders...

US mortgage rates are falling again, and purchase orders are also on the slide

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<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The mortgage rates fell by 2nd consecutive week a week to 2nd April, with the downside being that lenders lowered interest rates as orders on hand decreased. “Data-reactid =” 19 “> Mortgage rates fell by 2nd consecutive week a week to 2nd April, with the disadvantage that lenders lower interest rates as orders on hand decrease.

Mortgage rates rose in mid-March due to a surge in demand due to a COVID-19-driven decline in mortgage rates.

Lenders had to raise interest rates to deter applications as backlogs continued to increase and capacity issues affected processing times.

<p class = "Artboard-Atom Artboard-Text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Add to the 2nd The weekly decline in a row was the FED’s unlimited bond purchase program. This includes the purchase of mortgage-backed securities. “Data-reactid =” 22 “> Add to the 2ndnd The weekly decline in a row was the FED’s unlimited bond purchase program. This includes the purchase of mortgage-backed securities.

Compared to that time last year, 30-year fixed rates were down 75 basis points.

30-year fixed interest rates have also dropped 161 basis points from their recent high of 4.94% in November 2018.

Economic data of the week

Economic data was on the busier side during the week, with the focus on private sector PMIs in March and labor market numbers.

While both ISM Manufacturing PMI and ISM Non-Manufacturing PMI continued to expand in March, labor market numbers frightened the markets.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "While ADP Nonfarm Employment only decreased by 27,000 in March initial unemployment benefits rose to 6,648,000 in the week ending the 27thth March. The new record was above the 3,283,000 of the previous week, which was also a record high. “Data-reactid =” 28 “> While ADP Nonfarm Employment only decreased by 27,000 in March, initial unemployment benefits increased by 6,648,000 in the week ending December 27th March. The new record topped the previous week’s 3,283,000, which was also a record high.

The markets had expected a further sharp increase, but not by such a number. The economists had forecast an increase in claims of 3,500,000.

Given the fall in consumer confidence in March, the prolonged blockade in the US in April will weigh heavily on confidence and spending. The PMIs may have indicated further expansion in March, but it could be a different story in April, especially for the services sector.

All of this, along with the continuing spread of the coronavirus and forecasts of 100,000 to 240,000 deaths, put further pressure on mortgage rates.

Freddie Mac prices

<p class = "Artboard-Atom Artboard-Text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The weekly average rates for new mortgages from 2nd April were cited by Freddie Mac be: “data-reactid =” 33 “>The weekly average rates for new mortgages from 2nd April were cited by Freddie Mac be::

  • 30-year fixed interest rates fell 17 basis points a week to 3.33%. The rates decreased from 4.08% on the previous year. The average fee remained unchanged at 0.7 points.
  • The 15-year fix declined 10 basis points a week by 2.82%. Rates fell 3.56% year over year. The average fee remained unchanged at 0.6 points.
  • 5-year fixed interest rates rose 6 basis points a week to 3.40%. The rates decreased by 26 points compared to 3.66% in the previous year. The average fee was constant at 0.3 points.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "According to Freddie Mac, the 2ndnd The weekly decline in a row reflected improvements in market liquidity and sentiment. While the market has stabilized compared to previous weeks, the demand for home buyers has decreased due to the current economic conditions. Freddie Mac pointed out that upcoming economic stimulus is on the way to support both consumers and businesses. “Data-reactid =” 40 “> According to Freddie Mac, the 2ndnd The weekly decline in a row reflected improvements in market liquidity and sentiment. While the market has stabilized compared to previous weeks, the demand for home buyers has decreased due to the current economic conditions. Freddie Mac pointed out that upcoming economic stimulus is on the way to support both consumers and businesses.

Mortgage bank association rates

<p class = "Artboard-Atom Artboard-Text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "For the week until 27th March, Prices were quoted to be: “data-reactid =” 42 “>For the week until 27th March, Prices were quoted to be::

  • The average interest rates supported by the FHA for 30 years fell from 3.69% to 3.57. The points for 80% LTV loans decreased from 0.43 to 0.28 (including origination fee).
  • Average 30-year interest rates set with compliant credit balances decreased from 3.82% to 3.47%. The points for 80% LTV loans decreased from 0.35 to 0.33 (including origination fee).
  • The average 30-year interest rates for jumbo credit balances remained unchanged at 3.84%. With 80% LTV loans, the points fell from 0.35 to 0.31 (including origination fee).

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Weekly figures from the Mortgage Bankers Association showed this The Market Composite Index , a measure of mortgage loan application volume, increased 15.3% in the week of September 27th March. The index had dropped 29.4% in the previous week. “Data-reactid =” 47 “> The weekly numbers published by the Mortgage Bankers Association showed that the Market Composite Index, a measure of mortgage loan application volume, rose 15.3%% in the week to 27th March. The index had dropped 29.4% in the previous week.

The refinancing index rose 26% and rose 168% compared to the same week a year ago. The index slumped 34% in the previous week.

<p class = "Canvas-Atom Canvas-Text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The refinancing share of mortgage activity rose from 69.3% to 75 , 9% a week to 27th March. In the previous week, the share had dropped from 74.5% to 69.3%. “Data-reactid =” 49 “> The refinancing portion of mortgage activity increased from 69.3% to 75.9% in the week to the 27thth March. In the previous week, the share had dropped from 74.5% to 69.3%.

According to the MBA:

  • Mortgage applications and interest rates continue to be subject to significant volatility due to economic and financial uncertainties.
  • The proliferation of the corona virus has fueled uncertainty and the bleak economic outlook.
  • A significant increase in job losses probably led to a drop in home buyers during the week.
  • Purchase orders decreased by over 10%. After double-digit annual growth in early 2020, activity declined in two consecutive weeks last year.

For the coming week

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "It is a relatively quiet 1st half a week for the greenback. “data-reactid =” 57 “> It is a relatively quiet 1st half a week for the greenback.

The week’s key statistics are limited to JOLT’s job offers, inflation in March, and consumer sentiment in April. The focus is also on weekly unemployment benefits.

JOLT’s job offers in February are likely to have a modest impact on yields, with consumer sentiment and weekly unemployment claims likely to have the biggest impact.

The markets expect a further increase in claims and a decline in sentiment. The sentiment count will also give an indication of the consumer view of the administration’s stimulus bill. $ 1,200 per person may not be very comfortable considering what lies ahead.

While statistics have an impact, coronavirus numbers remain the main drivers during the week. Last week Trump warned of a tough two weeks …

This article was originally published on FX Empire

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