Apps Strengthen

The 30-year fixed-rate mortgage averaged 6.18%, unchanged from a week ago and 3 basis points lower than a year ago, according to Freddie Mac’s latest survey of 125 mortgage-lending companies, thrifts and commercial banks.

“Interest rates were flat this past week, reflecting the mixed messages from recent economic indicators,” said Freddie Chief Economist Frank Nothaft in the announcement. “The recently released manufacturing report showed an improvement, and while construction spending for November was down, it was still better than expected. On the other hand, a private sector employment report suggested that the labor market was weaker than anticipated.

“Currently the market is waiting for a clearer signal on the direction in which the economy is heading, and that may come on Friday when the December employment report is released.“

Meanwhile, half of the 100 mortgage industry bankers, brokers and individuals surveyed by Bankrate.com expect mortgage rates to be relatively unchanged over the next 35 to 45 days, 30 forecast an upturn and the remainder predict a downturn.

Edging up 1 BPS over the past seven days, the 15-year came in at 5.94%, Freddie reported.

The benchmark for long-term mortgage rates, the 10-year Treasury note, yielded 4.61% near midday — 9 BPS below last Thursday’s level.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 6.02%, rising 4 BPS within a week’s period, Freddie added.

Down 5 BPS from last week to 5.42% this week was the average for 1-year Treasury-indexed ARMs. The yield on the 1-year Treasury bill itself was 5.00% on Tuesday, up 3 BPS from a week earlier, Federal Reserve data showed.

Currently, the ARM share of total loan applications is at the lowest level since July 2003, as it fell to 20% from 23% a week ago, the Mortgage Bankers Association said on Wednesday.

The overall volume of mortgage applications improved by about 4% for the week ending Dec. 29 after being adjusted to account for the Christmas holiday, MBA reported. The upturn reflected a 4% increase in purchase money loan demand and a 2% uptick in refinance requests.

The refinance share of applications slipped from the prior week to 48%, MBA added.