|Amid an uncertain pace of economic growth, mortgage rates headed downward. But so did application activity.
“Mortgage rates eased a little more this week, as market participants were concerned over how much drag the slowing housing market may have on economic growth,” said Frank Nothaft, Freddie chief economist in an announcement. “For instance, last week’s release of housing starts for January showed the weakest reading since August 1997, due to the abundance of homes already on the market to purchase.
“Next week’s releases of new and existing home sales should offer a more complete gauge of the strength of the housing industry. In addition, the second estimate of economic growth in the fourth quarter of 2006 will be released next week and should further provide insight into what extent the housing market is affecting the economy.“
Over the next month and a half, 37 of 100 mortgage “experts” surveyed by Bankrate.com this week forecast mortgage rates will fall, the same number see rates unchanged and the remaining 26 see them rising.
Fannie Mae’s February economic and mortgage finance forecast has the 30-year averaging 6.31% for the quarter, rising 4 BPS next quarter and at 6.36% for the second half of the year. The latest outlooks by Freddie and the Mortgage Bankers Association respectively show the 30-year averaging 6.3% and 6.4% in the first six months of the year.
The average 15-year fixed-rate home loan reportedly stepped down 6 BPS from last week to 5.97%.
The 10-year Treasury note yielded 4.73% near midday, slightly worse than 4.70% at closing a week ago.
The 5-year Treasury-indexed hybrid adjustable-rate mortgage average was 5.96%, off 5 BPS from a week ago, Freddie said.
The smallest reported weekly decline — 3 BPS to 5.49% — occurred with the 1-year Treasury-indexed ARM average. The 1-year Treasury index itself fell 6 BPS in one week to 5.04% on Tuesday, according to Federal Reserve data.
Mortgage application volume took a 5 percent downturn in the week ending Feb. 16, reflecting similar-sized decreases in refinance requests and purchase money loan demand, the Mortgage Bankers Association announced on Wednesday.
As the refinance share of mortgage activity slipped from the previous week to 45 percent, the ARM share remained unchanged at 21%, MBA added.
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:...