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Mortgage originators got a break recently, with interest rates easing.
The average 30-year fixed rate fell five basis points during the past week to 6.62%, according to Freddie Mac’s latest survey of thrifts, commercial banks and mortgage lending companies. The 30-year is 1.06% higher than the same week a year ago. The 15-year fixed rate averaged 6.23%, down from 6.26% a week ago, Freddie reported. The 10-year Treasury yield was 4.96% near midday, down 6 BPS for the day and 14 BPS from the level reported a week prior. “The slight drop in long-term rates reflects a cautiously optimistic outlook in the market that core inflation remains contained,” said Freddie Chief Economist Frank Nothaft. “The soon-to-be released Producer Price Index, followed by the Consumer Price Index will give a better indication which way inflation is headed.” Treasury-indexed adjustable-rate mortgage rates also fell, with the average 5-year hybrid down six BPS to 6.20% and the 1-year ARM off five BPS to 5.63%, Freddie said. The 1-year Treasury yield itself was 5.03% Tuesday, the Federal Reserve reported, just 0.01% higher than a week prior. “Mortgage rates are down a little this week on news of disappointing job growth in May coupled with downward revisions for the previous two months,” Nothaft added. Nearly two-thirds of the mortgage bankers, mortgage brokers and other industry experts surveyed by Bankrate.com expect mortgage rates to rise over the next month-and-a-half, while a quarter expect a decrease. The rest see no change. Lower adjustable rates have yet to spark an increase in ARM share — which the Mortgage Bankers Association reported this week at 29%, down from 31% the prior week. Overall applications edged down 1 percent while refinance applications were off 4%, MBA said. Refinances represented 34% of the latest week’s activity, off just slightly. |
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Sam Garcia worked in mortgage lending for twenty years prior to becoming publisher of MortgageDaily.com, MortgageChronicle.com, FraudBlogger.com and CloserBlog.com.
email: [email protected]