Rates Edge Lower, Apps Improve

The 30-year fixed-rate mortgage averaged 6.79%, up just 1 basis point from last week, according to Freddie Mac’s latest Primary Mortgage Market Survey. At this time a year ago, the average was 5.62%.

“Since last week’s rate increase by the Federal Reserve came as no great surprise, mortgage rates remained nearly unchanged from the previous week,” explained Chief Economist Frank Nothaft in Freddie’s announcement. “This is fairly consistent with our economic outlook, which continues to forecast that the interest rate for the 30-year fixed-rate mortgage will gradually drift upward, but should remain under seven percent for the year.”

Of the 100 mortgage “experts” surveyed by Bankrate.com this week, 84 believe rates will rise over the next 30 to 45 days and the rest think they’ll remain relatively unchanged.

The average 15-year fixed rate also edged up just 1 BPS within a week to 6.44%, Freddie said.

The 10-year note, which serves as a gauge for long-term mortgage rates, had a price of 99.53 and yielded 5.18% late afternoon Thursday, slightly better than 5.20% a week prior.

Unchanged from a week earlier, 5-year Treasury-indexed hybrid adjustable-rate mortgages reportedly averaged 6.39%.

The average for 1-year Treasury-indexed ARMs also ticked up 1 BPS to 5.83% this week. The 1-year T-bill itself was at 5.29% as of Wednesday, 1 BPS below the level a week earlier.

ARM applications edged up from the prior week to comprise nearly 26% of total 1003s, the Mortgage Bankers Association reported Wednesday.

Overall mortgage application activity improved 6% during the week ending June 30, reflecting a 7% increase in purchase money loan requests and 5% upturn in refinance loan demand, MBA said.

The refinance share of mortgage activity remained at 35%, according to the trade group.