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A lull in mortgage rates and applications followed expectations of contained inflation.
Unchanged from a week ago, the 30-year fixed-rate mortgage averaged 6.73%, Freddie Mac said its latest survey of mortgage lending companies, thrifts and commercial banks showed. A year earlier, the average was at 6.80%. The 30-year was highest in the North Central region of the country, at 6.79%, and lowest in the Southeast, at 6.70%, the survey showed. “In a week marked by stock indexes reaching new highs on Wall Street, mortgage rates lingered near the previous week’s level as the latest economic indicators did not affect inflation expectations significantly,” explained Freddie Chief Economist Frank Nothaft in a written statement. In Congressional testimony yesterday, Federal Reserve Chairman Ben S. Bernanke said expectations of contained long-term inflation would play a role in that “core inflation should edge a bit lower, on net, over the remainder of this year and next year.” Over the next month and a half or so, mortgage rates will remain relatively unchanged, according to half of the panelists surveyed by Bankrate.com this week. Of the other half, 35 percent predicted a downturn and the rest a rise. For the three months ending Sept. 30, however, Fannie Mae’s latest forecast has the 30-year averaging 6.64% — 30 BPS higher than in the second quarter — and then sees it ending the year at 6.67%. The 15-year averaged 6.38%, slipping 1 basis points from last week, Freddie reported. The 10-year Treasury note yield was unchanged for the day at 5.04% in afternoon trading. Today’s yield is also better than 5.12% a week ago. The 5-year Treasury-indexed hybrid adjustable-rate mortgage average reportedly remained at 6.35%. Ticking up 1 BPS to 5.72% this week was the 1-year Treasury-indexed ARM average, Freddie said. The yield on the 1-year Treasury bill itself rose 5 BPS within a week’s period to 5.02% on Tuesday, according to Fed data. ARM application share increased to 21 percent of total mortgage requests from one-fifth the prior week, the Mortgage Bankers Association reported on Wednesday. Overall 1003 volume inched up 1 percent during the week ending July 13, reflecting a 5 percent increase in refinance requests and 2 percent decrease in purchase money demand, according to MBA’s Weekly Mortgage Application Survey. The share of refinance applications moved up from the prior week to 38%, MBA reported. |
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Coco Salazar is an associate editor and staff writer for MortgageDaily.com.e-mail: MortgageWriter@aol.com |