| Treading Shallow Water
Rates, apps worsen slightly June 27, 2003 By ANNE LINEBERRY |
| Fixed rates rose a smidgeon this week, countering the still falling adjustable rate mortgages (ARMs), according to an industry report.
In its Primary Mortgage Market Survey, Freddie Mac reported the average 30-year fixed rate at 5.24 percent, three basis points higher than last week. The 15-year rate averaged 4.63 percent, one basis point higher than last week’s 4.62 percent. Both rates carried 0.6 discount points, the survey said. The one-year Treasury-based ARM took off in the other direction, setting another record low of 3.45 percent, six basis points lower than last week’s 3.51 average, the survey said. ARMs also carried on average two-fifths of a discount point. All this week’s rates are down more than a point from their average a year ago this week. Applications continued their slowdown, with the Market Composite Index finishing the week ending June 20 at 1554.5 on a seasonally adjusted basis, down from 1701.7 the prior week, according to the Mortgage Bankers Association of America (MBA). All indices reported in the Weekly Mortgage Applications Survey decreased for the week. The refinance index fell to 8204.6 from 9162.7, the survey said, and refinances accounted for 75.8 percent of applications, down from 77.3 percent the prior week. The conventional index finished around nine percent down from the prior week as well. Fixed rates defied the interest rate cut by the Federal Reserve Board Wednesday, heading upward in spite of the announcement of a 25 basis point cut. According to Freddie, the Fed announced that is taking a neutral bias in future interventions. Bond rates began to rise in response, with the fixed-rate mortgages following along behind, Freddie said. As of Thursday’s close, the 10-year Treasury yield was 3.53%, up from Wednesday’s 3.40% and steadily climbing over last week’s 3.33% close. Bankrate.com’s weekly prediction concerning mortgage rates was split again. This week, half of the industry experts said rates would head back down, 40 percent said they would go up. Only 10 percent expected no change for the short term. Other predictions on the direction of mortgage rates were scarce this week, possibly due to the lack of indicative factors for the week. |
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Anne Lineberry is MortgageDaily.com‘s editor. She previously worked as an online editor/producer for DallasNews.com and on the Metropolitan desk for the print edition of The Dallas Morning News. Email Anne at AnneLineberry@MortgageDaily.com |
