Mortgage rates increased two basis points last week according to the Freddie Mac Primary Mortgage Market Survey released on March 5th. Rates held steady this week, hovering near their lowest level since 2022. In fact, rates are down nearly a full percentage point from this time in 2024, spurring activity from buyers, sellers and owners. As a result, refinance activity is up, and purchase applications are ahead of last year’s pace.
Mortgage applications increased 11.0 percent from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending February 27th. “Mortgage applications increased last week, driven by continued strength in refinance activity, as mortgage rates stayed near their lowest level since 2022,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Refinance applications increased for the fourth straight week to the strongest pace since 2022, with conventional refinances up 20 percent. The increase in the average loan size for refinances indicates that more borrowers with larger loan sizes are seeking to lower their monthly payments. Purchase applications also moved higher, with the week’s pace almost 10 percent ahead of last year’s pace, as lower rates and growing levels of housing inventory continue to support homebuyer interest.”
Wholesale prices rose at a faster-than-expected pace in January, countering hopes that inflation was easing, the Bureau of Labor Statistics reported last Friday. The core producer price index, which excludes volatile food and energy prices, increased a seasonally adjusted 0.8%, more than the 0.6% gain in December and well ahead of the Dow Jones consensus estimate for 0.3%. On an all-items basis, the headline PPI rose 0.5%, also above the forecast for 0.3% and 0.1 percentage point more than the prior month. For the full year, core wholesale prices accelerated 3.6%, while the headline index posted a 2.9% gain. Both figures are well ahead of the Federal Reserve’s 2% inflation goal and suggest that rising prices are still a factor for the U.S. Pipeline pressures as indicated by the PPI figures could keep the Fed cautious as it weighs its next moves on interest rates. Markets largely expect the Fed to stay on the sidelines until the summer, though Trump and other White House officials have pushed for lower rates.
Economic activity in the manufacturing sector expanded in February for the second straight month but only the third time in 40 months, say the nation’s supply executives in the latest ISM Manufacturing PMI Report. According to Susan Spence, Chair of the Institute for Supply Management Manufacturing Business Survey Committee “The Manufacturing PMI® registered 52.4 percent in February, a 0.2-percentage point decrease compared to the reading of 52.6 in January. The overall economy continued in expansion for the 16th month.” Spence continues, “In February, U.S. manufacturing activity remained in expansion territory, although growing at a slower pace than the month before. Of the five subindexes that make up the PMI®, two indicated slower growth compared to the previous month, and three demand indicators are in expansion”.
