U.S Mortgage Rates Hit Five Percent Following Another Spike in Inflation

div classBodysc17zpet90 cdBBJodivpIn the week ending April 14, 2022, mortgage rates rose for a sixth consecutive week.p

p30year fixed rates jumped by 28 basis points to 5.00. 30year fixed rates rose by 5 basis points in the week prior. It was the first time that mortgage rates stood at 5 since 2010.pdivdivdiv classBodysc17zpet90 cdBBJodiv

pYearonyear, 30year fixed rates were up by 196 basis points.p

p30year fixed rates were up by 6 basis points since November 2018s last peak of 4.94.p

h2 ideconomicdatafromtheweekEconomic Data from the Weekh2

pIn the first half of the week, inflation was back in the spotlight. With a further disruption to supply chains, the markets expect the upward trend in wholesale and consumer prices to continue.p

pIn March, the annual rate of inflation accelerated from 7.9 to 8.5, a new fourdecade high. The pickup in inflationary pressure drove Treasury yields northwards as the markets bet on a more aggressive Fed rate path for the year.p

pWholesale prices were also on the rise. In March, the producer price index increased by 1.4, following a 0.9 gain in the previous month.p

divdivdiv classBodysc17zpet90 cdBBJodivh2 idfreddiemacratesFreddie Mac Ratesh2

pstrongThe weekly average rates for new mortgages, as of April14, 2022, were quoted bystronga hrefhttps:www.mba.org2021pressreleasesnovembermortgageapplicationsincreaseinlatestmbaweeklysurveyx287934 relnofollow noopener noreferrer target_blankstrong Freddie Macstrongastrong to bestrong:p

li30year fixed rates jumped by 28 basis points to 5.00 in the week. This time last year, rates had stood at 3.14. The average fee remained unchanged at 0.8 points.li

li15year fixed rates surged by 26 basis points to 4.17 in the week. Rates were up by 182 basis points from 2.35 a year ago. The average fee increased from 0.8 points to 0.9 points.li

li5year fixed rates increased by 13 basis points to 3.69. Rates were up by 89 basis points from 2.80 a year ago. The average fee remained unchanged at 0.3 points.li

pAccording to Freddie Mac,p

liMortgage rates averaged five percent for the first time in over a decade.li

liThe combination of rising mortgage rates, elevated home prices, and tight inventory is making the pursuit of homeownership the most expensive in a generation.li

h2 idmortgagebankers‘associationratesMortgage Bankers’ Association Ratesh2

pstrongFor the week ending April 8, 2022, the stronga hrefhttps:www.mba.orgnewsandresearchnewsroomnews20220413mortgageapplicationsdecreaseinlatestmbaweeklysurveyhighermortgageratestoslowpurchaseoriginationsgrowthandrefinances relnofollow noopener noreferrer target_blankstrongratesstrongastrong werestrong:p

liAverage interest rates for 30year fixed with conforming loan balances rose from 4.90 to 5.13. Points increased from 0.53 to 0.63 incl. origination fee for 80 LTV loans.li

liAverage 30year fixed mortgage rates backed by FHA increased from 4.90 to 4.95. Points rose from 0.68 to 0.75 incl. origination fee for 80 LTV loans.li

liAverage 30year rates for jumbo loan balances increased from 4.51 to 4.68. Points rose from 0.34 to 0.37 incl. origination fee for 80 LTV loans.li

pWeekly figures released by the Mortgage Bankers Association showed that the Market Composite Index, a measure of mortgage loan application volume, decreased by 1 in the week ending April08. The Index declined by 6.3 in the previous week.p

pThe Refinance Index fell by 5 and was 62 lower than the same week one year ago. In the week prior, the Index slid by 10.p

pThe refinance share of mortgage activity decreased from 40.6 to 37.1 of total applications. In the previous week, the share fell from 40.6 to 38.8.p

pAccording to the MBA,p

li30year fixed mortgage rates rose to 5.13, the highest since November 2018.li

liRefinance activity took a hit, falling to the slowest weekly pace since 2019.li

liMBAs April 2022 forecast now sees mortgage originations down 35.5 from 2021, as a result of a projected 64 slide in refinance originations.li

liThe jump in mortgage rates will adversely impact the housing market and housing demand for the remainder of the year.li

h2 idfortheweekaheadFor the week aheadh2

pThere are no stats due out of the U.S to provide U.S Treasury yields with direction early in the week. A lack of stats will leave U.S Treasuries in the hands of FOMC member chatter, economic data from China, and news updates from Ukraine.p

pOn Monday, Q1 GDP numbers from China will set the tone.p

divdiv