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| There were less mortgage hunters in the mortgage market, despite another weekly decline in rates and more expected in the aftermath of Hurricane Katrina.
The average 30-year fixed-rate mortgage was 5.71%, down six basis points from both last week and a year ago, according to Freddie Mac’s latest Primary Mortgage Market Survey. The 15-year averaged 5.32%, slipping three BPS from a week earlier, Freddie said. Late Thursday, the long-term mortgage rate gauge, the 10-year Treasury note, was trading at 101.69 with a 4.03% yield, compared to 4.15% and 100.72 a week ago. The 5-year Treasury-indexed hybrid adjustable-rate mortgage’s reported average of 5.30% was unchanged from a week ago. The steepest decline was seen in the 1-year Treasury-indexed ARM, which at 4.48% fell eight BPS within the past week, according to Freddie. The decrease was smaller for the 1-year T-bill index itself, which was at 3.85% as of Tuesday, down three BPS from last week. “Market jitters about high energy costs and the spill over into other sectors of the economy have led to a decline in bond yields, which typically means lower mortgage rates,” commented Freddie chief economist Frank Nothaft in an announcement. “And speculation that the Federal Reserve may soon take a break in raising short-term rates reduces upward pressure on long- and short-term interest rates. “As if all that wasn’t enough, the devastation caused by Hurricane Katrina and the echo effects on future energy prices in the U.S. may mean that mortgages rates will fall even further in the coming days ahead.“ In line with the economist’s expectations, none of the 100 mortgage industry bankers, brokers and individuals Bankrate.com surveyed this week expect rates to go up over the next 35 to 45 days, about 60% believe rates will stay about the same, and the other 40% forecast a decrease. Despite the third consecutive week of rate decreases, loan originators had more time to soak in the sun as the volume of applications fell nearly 5% from the previous week, bringing the Market Composite Index down to 722.5, the Mortgage Bankers Association reported. But the index stands higher than 642.7 a year ago, even though the 30-year fixed-rate mortgage wasn’t far from its current level. The weekly decline in 1003s was led by a 5% downturn in refinance requests, followed by a 4% decrease in purchase-money application activity, MBA said. The refi share of applications remained at 44% while the ARM share edged down below 28%. |
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Coco Salazar is an assistant editor and staff writer for MortgageDaily.com. E-mail: [email protected]
