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| More mortgage hunters were in the market, despite that rates rose to levels unseen in years.
The 30-year fixed-rate mortgage rose seven basis points during the past week to an average of 6.10% — the highest level since July 2004, according to the Freddie Mac’s latest Primary Mortgage Market Survey. At this time last year, the average was 41 BPS lower. Freddie’s October forecast has the 30-year averaging 6.0% this quarter, 6.1% next quarter and rising to 6.4% in the fourth quarter 2006. While the Mortgage Bankers Association’s latest outlook coincides on the average for the current quarter, it has the 30-year averaging 6.3% early in the new year and ending it at 6.7%. At Bankrate.com, half the panel of 100 mortgage industry bankers, brokers and individuals it surveyed this week expect rates to fall over the next 35 to 45 days, while one-third believe rates will stay about the same and the rest foresee an upturn. The average for the 15-year edged up three BPS from a week earlier to 5.65% — the highest level since mid-June 2004, Freddie said. The 10-year Treasury note was trading at a 4.48% yield and price of 98.16 late Thursday, not much different than 4.46% and 98.28 a week ago. Meanwhile, the 5-year Treasury-indexed hybrid adjustable-rate mortgage average reportedly ticked up two BPS to 5.59% this week — the highest its been at since Freddie began tracking it in January. Climbing four BPS within the past week to reportedly the highest average since July 2002, the 1-year Treasury-indexed ARM came in at 4.89%. The ARM gauge, or 1-year T-bill, increased four BPS over one week to 4.18% on Wednesday, the Federal Reserve said. As adjustable rates edged up, the inverse occurred with the ARM share of mortgage applications, which edged down from the previous week closer to 29%, MBA said. While Freddie predicted the 1-year ARM will average 5.0% this quarter and end next year at 5.6%, MBA believes the respective figures will be lower at 4.8% and 5.3%. Swerving from three consecutive weekly declines, the volume of 1003s rose 6% last week, MBA said. The increase came as 7% more prospect borrowers than in the previous week requested a purchase money loan and as refinance requests increased 5%. Even so, the refi share of mortgage application activity nudged down from the prior week to below 43%, MBA reported. |
Coco Salazar is an assistant editor and staff writer for MortgageDaily.com. E-mail: [email protected]
