Refis May Jump

Freddie Mac’s weekly market survey revealed an average 30-year fixed-rate mortgage of 6.19% for the week ending Dec. 6, compared with last week’s 6.13%. Last year at this time, the 30-year averaged 6.84%.

“Consumer spending has kept the economy moving, and when initial holiday sales were better than expected, financial markets reacted with enthusiasm,” said Frank Nothaft, Freddie’s chief economist. “It was this potential pick-up in the economy that caused interest rates, including mortgage rates, to drift upwards this week.

Nationally, the 30-year was highest in the North Central states at 6.30%. The West had the lowest with 6.15%.

Freddie averaged the 15-year at 5.60%, up slightly from last week’s 5.57%. A year ago, the 15-year averaged 6.30%.

One-year Treasury-indexed adjustable-rate mortgages (ARMs) averaged 4.21% in the survey, up slightly from the prior week’s average of 4.19%. At the same time last year, the one-year ARM averaged 5.21%.

“What the economy and the housing industry need now in order to keep expanding is job growth,” Nothaft said. “Therefore, the November employment report due to be released [Friday] will shed some light on where both the economy and housing may be headed.”

Mortgage loan applications slowed down to 939.0 for the week ending Nov. 29, according to the Mortgage Bankers Association of America (MBA)’s weekly index, which runs a week behind Freddie’s rate survey.

That number, seasonally adjusted for the Thanksgiving holiday, is a 17.0% decrease from the previous week’s 1131.0. However, applications are still up from the 745.5 during the same time last year.

While applications did take a dive, last week was abnormal and too many conclusions shouldn’t be drawn from the latest mortgage data, said Akiva Dickstein, a Merrill Lynch mortgage strategist, to Dow Jones Newswires.

“I’m going to guess [the refinance index] is going to go back up rather than back down” next week, he said to the news wire.

Bankrate.com’s weekly survey asks mortgage experts to gauge rate activity over the next 30 to 45 days, and this week’s group was a little more decisive than last week’s.

More than half — 55.0% — said mortgage rates will decrease, 27.0% said they will increase, and 18.0% said they will remain unchanged (within 2 basis points). Last week’s group was split about one-third each way.

“Stocks have shot up 30.0% since October. A pullback for a few weeks should happen,” said Brian Peart, president of Nexus Financial in Atlanta. “This will give us a few weeks of lower rates, but it is only a pause. Long-term rates will shoot higher in January.”

Mid-morning Friday, the 10-year Treasury note was up 0.34375, lowering its yield to 4.08%.