|Rates rose to a level they are expected to remain this year.
The 30-year fixed-rate mortgage averaged 6.24%, edging up 1 basis point from a week ago, the latest Freddie Mac Primary Mortgage Market Survey reportedly showed. Last year at this time, the average was 5.57%.
“With no big economic news to influence the direction of mortgage rates this week, the numbers drifted very slightly upward,” explained Frank Nothaft, Freddie chief economist, in a written statement. “We see this trend continuing throughout 2006, with the 30-year … ending the year at about 6.3 percent.”
The expected level for the 30-year at yearend is about 20 BPS lower than what Freddie forecasted last month because even though “long-term bond yields have come up in recent weeks, long-term fixed mortgage rates have been slower to rise,” the secondary lender said in its February forecast.
The average for the 15-year came in at 5.83%, up 2 BPS from last week, Freddie said.
Two-thirds of the 100 mortgage industry “experts” Bankrate.com surveyed this week reportedly believe rates will rise over the next 35 to 45 days, and the rest predicted they’d stay within 2 basis points of current levels.
Going the opposite direction, the 10-year Treasury note, the gauge for long-term mortgage rates, yielded 4.53% with a price of 99.69 in afternoon trading today, slightly better than 4.56% and 99.50 at the market’s close a week earlier.
The 5-year Treasury-indexed hybrid adjustable-rate mortgage reportedly nudged up 2 BPS in one week to 5.89%.
Freddie said the 1-year Treasury-indexed ARMs averaged 5.34%, just 1 BPS above last week’s average. The 1-year ARM’s index, the 1-year Treasury-bill itself, was 4.66% Wednesday, up six BPS from a week earlier, according to the Federal Reserve.
Initial rates on fully amortizing, 1-year ARMs are also forecasted to rise at a slower rate than predicted last month, now ending the year with an average of 5.3%, instead of 5.5%, according to Freddie’s updated forecast.
ARMs comprise about 30% of total mortgage applications, the Mortgage Bankers Association reported.
Originators took in 1% fewer applications last week than in the week ending Jan. 27, MBA said. The slight decline reflected the 2% decrease in purchase money application activity, as requests were unchanged from the prior week.
The refinance share of total applications slipped from the previous week to 42%.
Refinance to a lower interest rate: If interest rates have dropped since you took out your original mortgage, refinancing to a lower rate can help you save money on your monthly payments and reduce the overall cost of your loan. Refinance to a shorter loan term:...