Rates, Purchase Apps Climb

The 30-year fixed-rate mortgage averaged 6.36%, up five basis points from last week, according to Freddie Mac’s Primary Mortgage Market Survey. At this time last year, the average was 5.76%.

The average 15-year, at 5.89%, increased four BPS within the past week, Freddie reported.

At Thursday’s close, the 10-year Treasury note yielded 4.56% and was priced 97.56, better than 4.65% and 96.84 a week ago.

Up five BPS from last week, the average for the 5-year Treasury-indexed hybrid adjustable-rate mortgage came in at 5.81%.

The 1-year Treasury-indexed ARM average reportedly edged up three BPS within the past seven days to 5.12%. The 1-year T-bill also moved up three BPS within a week to 4.37% Wednesday, Federal Reserve data indicate.

“News that wages grew faster than had been expected in October reinforced fears of inflation in the financial markets, and that bumped up interest rates again this week,” said Frank Nothaft, Freddie’s chief economist, in a written statement. “Consumer Price Index and Producer Price Index figures due out next week will help to confirm or deny whether market concerns are warranted.”

But Freddie said it does expect rates to continue to rise gradually over the next 12 or so months.

The 100 mortgage “experts” surveyed by Bankrate.com on their outlook for rates over the next 35 to 45 days did not provide clear direction; half expected rates to rise and the other half anticipate a fall.

Mortgage application volume nudged up about 2% in the week ending Nov. 4 as the 6% increase in purchase-money loan requests offset the 3% decrease in refinance application activity, the Mortgage Bankers Association reported.

MBA noted that “home purchase applications dropped below their 2004 level for the first time in six months,” and that they remain nearly 4% below their level in early November 2004.

The refinance share of mortgage applications dropped below 42% last week, the association said, while the ARM share inched up to 32%.