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The latest week held little change for interest rates, but that didn’t stop refinance applications from jumping.
The 30-year fixed-rate mortgage average edged down 1 basis point from last week to 6.30%, Freddie Mac said in its latest Primary Mortgage Market Survey. At this time last year, the average was 5.98%. The mortgage “experts” surveyed by Bankrate.com this week did not provide much direction as to where rates will go in the next 35 to 45 days; one-third of the panelists forecasted a downturn, another third foresaw an upturn and the rest predicted they’d remain relatively unchanged. The consensus among the latest mortgage market forecasts of Freddie, Fannie Mae and the Mortgage Bankers Association is that rates will head up, with the 30-year expected to average 6.39% this quarter, on the low end, and 6.5%, on the high end. The 15-year, reportedly at 5.98%, was unchanged from a week ago. Accordingly, the gauge for long-term mortgage rates, the 10-year Treasury note, yielded 4.61% near midday, unchanged from a week earlier. The average for 5-year Treasury-indexed hybrid adjustable-rate mortgages was also unchanged at 6.00% this week, Freddie said. At 5.46%, the average for 1-year Treasury-indexed ARMs was reportedly 1 basis point lower than a week ago. The 1-year T-Bill itself had the same weekly decrease to 4.90% on Tuesday, according to Federal Reserve data. “Mortgage rates fell to a six-month low this past week, and, not surprisingly, home refinancing rose 18 percent last week, accounting for almost half of all mortgage applications,” said Freddie Chief Economist Frank Nothaft in the announcement. “This is due both to the recent decline in mortgage rates and to homeowners who are refinancing ARMs rather than waiting for them to reset in the future when rates may be higher.“ An 18% surge in refinance requests and an 8% increase in purchase money loan demand pushed the overall volume of mortgage applications up 12% from the prior week, according to MBA’s latest Weekly Mortgage Applications Survey. The refinance share of mortgage applications increased from the previous week to 47 percent — the highest level since February 2005 — and the ARM share edged up to 27%, MBA said. |
Coco Salazar is an assistant editor and staff writer for MortgageDaily.com. e-mail: [email protected]