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| Fixed mortgage rates rose for the fifth consecutive week to the highest level in 10 months as 1003 loan applications worsened.
In Freddie Mac’s Primary Mortgage Market Survey for the week ending June 26, the 30-year fixed-rate mortgage averaged 6.45%, rising from 6.42% seven days earlier. During the same week in 2007, the 30-year averaged 6.67%. Freddie said the average 30-year hasn’t been this high since Aug. 23, 2007, when it stood at 6.52%. The average 30-year has risen each week since May 22, 2008. The 15-year fixed-rate average edged 2 basis points higher from last week to 6.04%, the survey said. Freddie Chief Economist Frank Nothaft noted better-than-expected housing activity impacted market activity. The closely watched 10-year Treasury yield stood at 4.06% early today, tumbling from 4.19% a week earlier, according to CNNMoney. In a statement yesterday, the Federal Open Market Committee said it will hold the federal funds rate at 2 percent. The committee noted, however, the while household spending has firmed up, “labor markets have softened further and financial markets remain under considerable stress. Tight credit conditions, the ongoing housing contraction, and the rise in energy prices are likely to weigh on economic growth over the next few quarters.” More than half of the mortgage bankers, mortgage brokers and “other industry experts” surveyed by Bankrate.com this week project mortgage rates will remain within 2 BPS of their current levels during the next 35 to 45 days. Meanwhile, 38% forecast a rise and 8% see a decline. Freddie reported the 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 5.99% in its latest survey, jumping 10 BPS from a week prior. The 1-year Treasury-indexed ARM yield was 5.27%, up 8 BPS, the survey said. ARM yields increased over market uncertainty about Fed actions, Nothaft explained. The yield on the 1-year Treasury itself was 2.48% Wednesday, falling from 2.53% seven days prior, U.S. Treasury data indicated. Another ARM index, the 6-month London Interbank Offered Rate, saw its yield fall 3 BPS over the past week to 3.19%. ARMs accounted for 9% of applications tracked in the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending June 20, down from 10% the previous week. Overall mortgage applications fell 9% from the prior week on a seasonally adjusted basis , bringing MBA’s Market Composite Index to 461.3. Refinance applications were down 12% and purchase applications were off 7%. The share of applications that were for refinances was 36%, off slightly from 37% the previous week, MBA said. |
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Sam Garcia worked in mortgage lending for twenty years prior to becoming publisher of MortgageDaily.com. e-mail:Â mtgsam@aol.com |
