Interest rates rose, new mortgage activity eased and at least one panel predicts a further increase in rates. But the latest available data suggests mortgages rates will be lower in this week’s reports.
Rising from the previous week, the average 30-year fixed-rate mortgage was 4.83 percent in Freddie Mac’s weekly survey of 125 thrifts, credit unions, commercial banks and mortgage lending companies for the week ended Thursday.
The 30-year was 4.94 percent during the same week last year.
Frank Nothaft, Freddie’s chief economist, explained in the report that market concerns over stronger economic growth sparked fears of inflation and pushed bond yields higher.
An analysis by Mortgage Daily of Treasury activity indicates that lower rates should prevail in this week’s reports, with the 30-year likely coming in between 4.70 percent and 4.75 percent.
There was no doubt among the panelists surveyed by Bankrate.com for the week Dec. 16 to Dec. 22 about where mortgage rates are headed. Nearly three-quarters projected an increase during the next week, while 20 percent saw no changes ahead and 7 percent predicted a decline.
The rate on a jumbo mortgage, loans more than $417,000, improved relative to conforming loans based on the Mortech-Mortgage Daily Mortgage Market Index report for the week ended Wednesday.
Moving higher from a week earlier, the fixed-rate 15-year mortgage was 4.17 percent in Freddie’s report.
The smallest weekly increase was credited to the one-year Treasury-indexed ARM, which Freddie reported at 3.35 percent. The one-year averaged 4.34 percent at this time during 2009.
The share of borrowers opting for an adjustable-rate mortgage inched down to 5.5 percent from the prior week’s 5.6 percent in the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ended Dec. 10.
The Mortgage Market Index fell to 221 from the previous week’s 260 but was higher than 197 a year earlier. The index reflects rate-shopping activity for consumers and was lower as a result of weakening refinances. The share of prospective borrowers who were seeking a refinance fell to 52 percent from 56 percent a week earlier.
The average U.S. mortgage amount in the Mortgage Market Index report was $204,437, falling from $209,625 seven days earlier.
The highest average was Washington, D.C.’s, $280,756, and South Dakota’s $133,406 was the lowest.