Fixed-rate mortgages rose this week but are likely to be unchanged in next week’s reports. Consumers seeking refinances drove a small decline in prospective borrower activity.
Increasing slightly from last week, the average 30-year fixed-rate mortgage was 4.23 percent in Freddie Mac’s Primary Mortgage Market Survey for the week ended Thursday. The 30-year was 5.03 percent during the same week last year.
Mortgage rates won’t change much in next week’s reports based on the 10-year Treasury yield, which closed at 2.63 percent Friday based on data reported by the U.S. Department of the Treasury. The 10-year yielded 2.59 percent a week earlier.
A majority of the panelists surveyed by Bankrate.com for the week Oct. 28 to Nov. 3, however, predicted mortgage rates will increase during the next week. No change was expected by nearly a third of the panelists.
In its Mortgage Finance Forecast, the Mortgage Bankers Association has the 30-year averaging 4.4 percent in the fourth quarter and 4.7 percent in the first three months of next year.
Like the 30-year, the average 15-year fixed-rate mortgage edged up in Freddie’s latest survey to 3.66 percent.
But there was no change for the one-year Treasury-indexed adjustable-rate mortgage, which averaged 3.30 percent in Freddie’s survey.
The share of prospective borrowers who applied for an ARM in MBA’s Mortgage Applications Survey for the week ended Oct. 22 fell to 5.3 percent from 5.8 percent seven days earlier. In its forecast, the trade group predicted ARM share will be unchanged between the fourth quarter and the first-quarter 2011 at 6 percent.
Mortgage activity dropped 8 percent based on the Mortech-Mortgage Daily Mortgage Market Index for the week ended Oct. 27. Refinances drove the decline, with refinance share cut to 60 percent from the previous week’s 62 percent.
MBA’s outlook has ARM share falling from nearly three quarters in the third quarter to just over half in the first period of next year.
The average U.S. loan amount shrank to $212,726 from $216,844, based on the Mortgage Market Index report. The biggest average loan was in Washington, D.C.: $277,967. South Dakota’s $146,871 was lowest.
