Mortgage rates snap back to above 5% levels

Aug. 11, 2022 10:12 AM ETREM, KBH, TOL, PHM, NVR, DHI, LEN, XHB, REZ, HOMZBy: Khyathi Dalal, SA News Editor11 Comments

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  • 30-year fixed-rate mortgage bounced back to above 5% levels to average at 5.22% with an average 0.7 point for the week ending Aug.11, up from last week when it averaged 4.99%. it is significantly still higher than the rate of 2.87% a year ago, according to the Freddie Mac Primary Mortgage Survey.
  • The volatility in rates reflects the Federal Reserve actions to control persistent inflation; Fed raised interest rates by 75 basis points in its July’s meeting, marking its fourth rate hike this year.
  • 15-year fixed-rate mortgage averaged 4.59% with an average 0.7 point, up from last week when it averaged 4.26% and higher from 2.15% a year ago.
  • 5-year Treasury indexed hybrid adjustable-rate mortgage averaged 4.43% with an average 0.0 point, down from last week when it averaged 4.25% and higher than 2.44% a year ago.
  • "Although rates continue to fluctuate, recent data suggest that the housing market is stabilizing as it transitions from the surge of activity during the pandemic to a more balanced market. Declines in purchase demand continue to diminish while supply remains fairly tight across most markets. The consequence is that house prices likely will continue to rise, but at a slower pace for the rest of the summer," chief economist Sam Khater commented.
  • A recent Bank of America internal data suggested median rent payments increased by 7.4% Y/Y in July; households' deposit and savings balances remain elevated and consumers have not yet shown signs of increased borrowing.
  • "While wallets are getting squeezed for the 34% of US households who are renters, relief from lower gas prices and retail promotions encouraged consumers to continue to spend throughout July," economist for the Bank of America Institute Anna Zhou commented.
  • National Association of Realtors data indicated that 80% of U.S. metros saw their median single-family existing home sales price increase by double digits from the previous year.
  • It added that 44% of sales of single-family existing home sales came from the South in Q2; region also posted the largest home price appreciation of 18.2%.
  • Homebuilding stocks: (DHI), (KBH), (LEN), (TOL), (PHM), (NVR)
  • ETFs Watch: (XHB), (REM), (REZ), (HOMZ)

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