In the week ending April 21, 2022, mortgage rates rose for a seventh consecutive week.

30-year fixed rates rose by 11 basis points to 5.11%. 30-year fixed rates jumped by 28 basis points in the week prior.

Year-on-year, 30-year fixed rates were up by 214 basis points.

30-year fixed rates were up by 17 basis points since November 2018’s last peak of 4.94%.

Economic Data from the Week

There were no material stats from the US for the markets to consider in the first half of the week. The lack of stats left mortgage rates in the hands of market sentiment towards inflation and Fed monetary policy.

Continued concerns over the impact of supply chain disruption on inflation drove Treasury yields higher ahead of a scheduled Fed Chair Powell speech on Thursday.

Freddie Mac Rates

The weekly average rates for new mortgages, as of April-21, 2022, were quoted by Freddie Mac to be:

• 30-year fixed rates increased by 11 basis points to 5.11% in the week. This time last year, rates had stood at 2.97%. The average fee remained unchanged at 0.8 points.

• 15-year fixed rates surged by 21 basis points to 4.38% in the week. Rates were up by 209 basis points from 2.29% a year ago. The average fee fell from 0.9 points to 0.8 points.

• 5-year fixed rates increased by 6 basis points to 3.75%. Rates were up by 92 basis points from 2.83% a year ago. The average fee remained unchanged at 0.3 points.

According to Freddie Mac,

• Mortgage rates increased for a seventh consecutive week, driven by the upward trend in Treasury yields.
• The surge in rates has impacted demand at the traditionally busiest time of the homebuying season.
• Buyers who remain interested in purchasing a home may find more moderate competition.

Mortgage Bankers’ Association Rates

For the week ending April 15, 2022, the rates were:

• Average interest rates for 30-year fixed with conforming loan balances rose from 5.13% to 5.20%. Points increased from 0.63 to 0.66 (incl. origination fee) for 80% LTV loans.
• Average 30-year fixed mortgage rates backed by FHA increased from 4.95% to 5.11%. Points rose from 0.75 to 0.90 (incl. origination fee) for 80% LTV loans.
• Average 30-year rates for jumbo loan balances increased from 4.68% to 4.76%. Points rose from 0.37 to 0.46 (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 5% in the week ending April-15. The Index declined by 1% in the previous week.

The Refinance Index fell by 8% and was 68% lower than the same week one year ago. In the week prior, the Index fell by 5%.

The refinance share of mortgage activity decreased from 37.1% to 35.7% of total applications. In the previous week, the share fell from 40.6% to 37.1%.

According to the MBA,

• Concerns about rapid inflation and tighter US monetary policy continued to push Treasury yields higher.
• Mortgage rates hit their highest level in over a decade.
• 30-year fixed rates have jumped 70 basis points over the past month and sit two full percentage points higher than a year ago.
• The upswing in rates has pushed out borrowers, causing the refinance Index to fall for a sixth consecutive week.
• Amidst affordability challenges and low inventory in the housing market, buyers are pulling back or delaying home purchases.

For the week ahead

From the US, core durable goods and consumer confidence figures will draw attention on Tuesday. Expect consumer confidence to have more influence on yields.

While the stats will provide direction, the markets will also track crude oil prices, news updates from China on lockdown measures, and the war in Ukraine.

Sentiment towards supply chain disruption remains a key consideration for inflation.

This article was originally posted on FX Empire