1003s Continue Slide

The average for the 30-year fixed-rate mortgage was 6.58%, moving up 5 basis points from last week to the highest level since June 2002, Freddie Mac’s latest survey of 125 mortgage-lending companies, thrifts and commercial banks reportedly showed. A year ago, the average was 80 BPS lower.

“Indications of a stronger economy gave rise to an increase in mortgage rates this week,” Freddie Chief Economist Frank Nothaft said in a written statement. “Consumer confidence and existing home sales unexpectedly rose. Much of this strength is attributed to a healthy labor market, which translates into greater consumer spending.

“We expect mortgage rates to gradually rise throughout the year.”

Fannie Mae’s latest forecast has the 30-year averaging 6.4% this quarter and at nearly 6.5% the last half of the year, while the Mortgage Bankers Association sees the averages a little higher, at 6.5% and 6.7% for the respective periods.

Three-fifths of the 100 mortgage “expert” panelists Bankrate.com surveyed this week think rates will rise over the next 35 to 45 days, and the remaining portion believe rates will stay about the same.

The 15-year averaged 6.21%, reportedly reflecting an increase of 4 BPS from a week earlier.

The 10-year Treasury note had a price of 95.56 in afternoon trading Thursday and yielded 5.07%, just 3 BPS higher than reported last week.

The average for 5-year Treasury-indexed hybrid adjustable-rate mortgages was also 6.21%, rising 5 BPS from a week ago, Freddie reported.

Up 5 BPS from a week ago, Freddie said the average for 1-year Treasury-indexed adjustable-rate mortgages came in at 5.68%. The 1-year T-bill itself stood at 4.98% as of Wednesday, climbing 9 BPS from a week earlier, the Federal Reserve reported.

Mortgage application volume fell about 4 percent in the week ending April 21, reflecting a 4% decline in requests for purchase-money loans and a 2% decrease in refinance application activity, MBA reported. This the third consecutive week overall volume has decreased.

Meanwhile, the refinance share of mortgage activity nudged up from the prior week to 37%, MBA said, and the ARM share moved in the opposite direction to 28%.