Mortgage rates retreated this week after weaker-than-expected employment data.
According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average slipped to 4.59 percent with an average 0.5 point. (Points are fees paid to a lender equal to 1 percent of the loan amount.) It was 4.6 percent a week ago and 3.9 percent a year ago.
The 15-year fixed-rate average fell to 4.05 percent with an average 0.5 point. It was 4.08 percent a week ago and 3.90 percent a year ago. The five-year adjustable rate average dropped to 3.9 percent with an average 0.3 point. It was 3.93 percent a week ago and 3.14 percent a year ago.
The U.S. economy added 157,000 jobs in July, which was slightly below the expectations of many economists. A slowing job rate can indicate the economy is ebbing. That concern was enough to push mortgage rates down a bit.
“Mortgage rates fell slightly after an unexpectedly weak July jobs report, but are still above where they stood a month ago,” said Aaron Terrazas, senior economist at Zillow. “This week should be fairly quiet in bond markets, except potentially for Friday’s release of inflation data. A strong inflation report could put upward pressure on rates.”
Bankrate.com, which puts out a weekly mortgage rate trend index, found that more than half the experts it surveyed say rates will remain relatively stable in the coming week. Jim Sahnger, mortgage planner at C2 Financial, is one who predicts rates will hold steady.
“Following weaker-than-expected employment numbers and no movement from the Fed last week, we have been somewhat range-bound and look to continue until we have something to move us higher or lower,” Sahnger said. “This week’s inflation numbers could be the trigger, but we’ll have to see.”
Meanwhile, mortgage applications were down, according to the latest data from the Mortgage Bankers Association. The market composite index -- a measure of total loan application volume – decreased 3 percent from a week earlier. The refinance index fell 5 percent, while the purchase index dropped 2 percent.
The refinance share of mortgage activity accounted for 36.6 percent of all applications.
“Despite recent data indicating a strong U.S. economy and job market, including signs of wage growth, overall mortgage applications fell for the third straight week as housing continues to be hampered by the lack of homes for sale and crimped affordability,” said Joel Kan, an MBA economist. “The Market Index, which measures both purchase and refinance applications, was decreased to its lowest level since January 2016. Both purchase and refinance indexes decreased as well this week, with the refinance index staying close to its lowest level since December 2000.”
The MBA also released its mortgage credit availability index (MCAI) this week that showed credit availability increased in July. The MCAI rose 1.7 percent to 184.1 last month. An increase in the MCAI indicates that lending standards are loosening, while a decline signals that they are tightening.
“Credit availability continued to expand, driven by an increase in conventional credit supply,” Kan said. “More than half of the programs added were for jumbo loans, pushing the jumbo index to its fourth straight increase, and to its highest level since we started collecting these data. There was also continued growth in the conforming non-jumbo space, which reached its highest level since October 2013.”
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