Mortgage rates hit new record lows and applications hit record highs, according to industry reports.
The 30-year fixed-rate mortgage averaged a new record low 5.26 percent this week, according to Freddie Mac. According to records on Freddie's website, this marks the eighth straight week of decline. The data for the 15-year rate fared comparably with Freddie recording a record low of 4.66, down from 4.73 last week. It also has experienced an eight-week downward slide. Both rates averaged half a discount point.
Last year, the 30-year fixed rate averaged 6.71 percent and the 15-year rate averaged 6.18 percent.
Low rates combined with another week of record high applications, according to the Weekly Mortgage Applications Survey of the Mortgage Bankers Association of America (MBA). The Market Composite Index was reported at 1856.7 for the week ending May 30, marking another record high and a 202.7 percent increase over last year. The Market Index for the prior week was reported at 1634.6.
The Refinance Index also broke its prior record, hitting 9977.8; up from 8840.9 one week earlier and topping the previous record from March of 9387.0. Refinances accounted for 76.7 percent of total applications, the survey reported, down slightly from 77.1 percent the prior week.
Prognosticators still aren't unifed in a single vision. Frank Nothaft, Freddie's chief economist, said the economy is "poised for growth in the near future and may begin a gentle upswing soon."
Nothaft also mentioned the potential impact of employment data, which should be released Friday, and the rate-tamping effect of the market's expectation that the Federal Reserve Board will cut interest rates at its next meeting.
At Bankrate.com, mortgage industry experts remained divided, with 30 percent predicting that rates would go up, 40 percent predicting further slides, and 30 percent opting for rates to remain "unchanged."
The 10-year Treasury bond yield closed at 3.34% Thursday, even with last week's close.