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| Mortgage applications continued to fall as rates rose for the fourth consecutive week and are expected to keep creeping upward.
The 30-year fixed-rate mortgage averaged 5.98%, climbing seven basis points within the past week to the highest level since March 31 when the average was 6.04%, according to Freddie Mac’s latest survey of 125 mortgage-lending companies, thrifts and commercial banks. A year ago, the average was 16 BPS lower. The average 15-year fixed rate was 5.54%, which Freddie said is six BPS higher than last week. Near midday, the benchmark 10-year Treasury note yielded 4.36% with a price of 99.09, worse than 4.29% and 99. 63 a last week. Up four BPS from a week ago, 5-year Treasury-indexed hybrid adjustable-rate mortgages reportedly averaged 5.48%. Once again, Freddie said the 1-year Treasury-indexed ARM average jumped by the most — nine BPS to 4.77% this week — in line with the 1-year T-bill’s reported 14 BPS weekly upturn to 4.09% as of Tuesday. “Mortgage rates have been rising for the last four weeks on inflation jitters caused in part by extended high energy costs,” commented Freddie chief economist Frank Nothaft in an announcement. “Still we need more concrete data to predict the direction of the national economy, including mortgage rates. “That said, we do think that the economy will continue to grow, albeit at perhaps a slightly slower pace than in the recent past.  Mortgage rates will most likely continue to rise with the expansion of the economy.“ Half the panel of 100 mortgage “experts” surveyed by Bankrate.com this week believe rates will remain right about where they are over the next 35 to 45 days, while one-quarter say they’ll rise and the other quarter is predicting a drop. In its latest forecast, Fannie Mae said its “overall view of rates for the next year hasn’t changed by much: higher short- and long-term rates than today, but with only modest increases in long-term rates.” Fannie reportedly expects the 30-year to average 5.64% and edge up to 5.65% in the first quarter 2006 — well below the current level. The predicted figures are much lower than Freddie’s expectations of 5.9% and 6.0% for the same periods and the Mortgage Bankers Association’s respective outlook of 5.8% and 6.1%. Mortgage application volume was practically unchanged from the prior week and year, as the 2% weekly decline in purchase money requests was offset by a slight uptick in refinance application activity, according to MBAs latest Weekly Mortgage Applications Survey. The refi share of mortgage activity edged up from the prior week to nearly 45%, MBA said, and the ARM share nudged up to 30%. |
Coco Salazar is an assistant editor and staff writer for MortgageDaily.com. E-mail: [email protected]
