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More people applied for mortgages as rates retreated from four weeks of climbing.
The 30-year fixed-rate mortgage averaged 6.43%, slipping 4 basis points from a week ago, Freddie Mac said its latest survey of 125 mortgage-lending companies, thrifts and commercial banks. “Although 30-year mortgage rates are about three-fourths of a percentage point higher than they were last year, it’s good to keep in mind that rates have dropped from the high of 6.80 percent reached just eight weeks ago,” commented Freddie Chief Economist Frank Nothaft in an announcement. “And with short-term interest rate increases seemingly on hold, for a while at least, interest rates over all should not experience any big shifts in either direction. “The risk to our forecast of relatively stable mortgage rates is that inflation will unexpectedly heat up, causing bond markets to raise their expectations that the Fed will intervene by raising short-term rates. In that case, mortgage rates will again start to rise.“ Freddie’s September forecast has the 30-year averaging 6.6% this quarter and falling 10 BPS more by next quarter. Meanwhile, 63 of the 100 mortgage “experts” surveyed by Bankrate.com forecast rates will remain relatively unchanged for the next 35 to 45 days, a quarter foresaw a downturn and the rest thought they’d increase. The 15-year averaged 6.11%, down 5 BPS from last week, Freddie said. The 10-year Treasury note traded at a price of 100.63 with a 4.79% yield, just 1 BPS higher than at the market’s close a week ago. The average for 5-year Treasury-indexed hybrid adjustable-rate mortgages followed closely behind at 6.10%, or 4 BPS below the level reported last week, Freddie’s survey showed. Down 3 BPS from a week ago, the 1-year Treasury-indexed ARM average was 5.60%. The 1-year T-Bill itself stood at 5.02% Tuesday, unchanged from a week earlier, the Federal Reserve reported. Loan originators completed 3% more mortgage applications during the week ending Sept. 8, mainly due to a 5% increase from the previous week in loan requests from people looking to buy a home as refinance requests were unchanged, the Mortgage Bankers Association said on Wednesday. The refinance share of applications reportedly decreased from the prior week to 40% and the ARM share moved below 26% — the lowest level since October 2003. |
Coco Salazar is an assistant editor and staff writer for MortgageDaily.com. e-mail: [email protected]