Interest rates again fell to new lows but failed to entice more consumers in the mortgage market. Mortgage rates are likely to be higher in next week’s reports.
As goes the weekly rhetoric lately, a new record was reported Thursday by Freddie Mac for the average 30-year fixed-rated mortgage. In its latest weekly survey, the secondary mortgage lender said the 30-year rate fell to 4.32 percent — the lowest level recorded since it began tracking the 30-year in 1971 — from 4.36 percent a week earlier. The 30-year was 0.76 percent lower than the same week last year.
In explaining the decline, Freddie Deputy Chief Economist Amy Crews Cutts pointed to Federal Reserve Board Chairman Ben Bernanke’s Aug. 27 speech in Wyoming indicating that inflation should remain in check for some time with a growing economy and reasonably stable inflation expectations.
Borrowers on jumbo mortgages, loans higher than $417,000, saw 30-year rates deteriorate 0.02 percent when compared to a conforming mortgage, based on data from the Mortech-Mortgage Daily Mortgage Market Index report for the week ended Sept. 1.
Mortgage rates are likely to shoot up in next week’s reports based on the movement of the 10-year Treasury yield, which jumped to 2.627 percent during trading today from 2.50 percent at the market’s close last Thursday, according to data published by the U.S. Department of the Treasury and WSJ.com.
But a majority of Bankrate.com panelists for the week Sept. 3 to Sept. 9 see no change over the next week for mortgage rates, while the rest were equally split about whether rates would rise or retreat by at least 0.03 percent.
At 3.50 percent, the one-year Treasury-indexed ARM was slightly lower than in Freddie’s prior survey.
Although mortgage rates continued to improve this week, fewer consumers went shopping for a new loan. The Mortgage Market Index — a gauge of new mortgage broker activity –was 348 this week, easing from 355 in the week ended Aug. 25.
The Mortgage Market Index report indicated that the average U.S. loan amount fell to $214,263 from $214,838 last week. The highest average of $321,119 was in Washington, D.C., and the lowest was Mississippi’s $155,351.
Despite the decline in new activity, the share of prospective borrowers who were seeking a refinance was up less than a basis point to 64 percent — indicating that fewer consumers inquired about a loan to buy a home.
