|Sliding mortgage rates weren’t enough to push applications higher.
Down by 9 basis points from last week to the lowest level since early March, the 30-year fixed-rate mortgage averaged 6.31%, Freddie Mac said in its latest survey of 125 mortgage-lending companies, thrifts and commercial banks. At this time a year ago, the average was 5.91%.
“This week’s economic releases, which showed a slight one-year decline in both new and existing house prices in August, fell short of market expectations and prompted market analysts to reassess how much the housing sector will contribute to economic growth in the coming year,” said Frank Nothaft, Freddie chief economist, in a written statement. “As a result, mortgage rates declined even further this week.”
Fannie Mae said it expects the 30-year to average 6.39% next quarter and start rising from that level until the second quarter 2007. The Mortgage Bankers Association sees the level at 6.4% next quarter and Freddie sees it at 6.5%, according to the groups’ latest outlooks.
Over the next 35 to 45 days, half the 100 mortgage “experts” surveyed by Bankrate.com this week see rates staying relatively unchanged, 30 think rates will fall and the rest predict that rates will rise.
The 15-year average fell 8 BPS from a week earlier to 5.98%, Freddie said.
The 10-year Treasury note yielded 4.61% with a price of 102.03 in late afternoon trading, nudging down from a 4.65% yield a week ago.
The average 5-year Treasury-indexed hybrid adjustable-rate mortgage reportedly slid 8 BPS to 6% this week.
The smallest weekly decline — 7 BPS to 5.47% — was in the 1-year Treasury-indexed ARM average, Freddie said. The 1-year T-Bill itself was 4.89% Wednesday, 11 BPS lower than a week earlier, according to Federal Reserve data.
As the ARM share of total applications edged down from the previous week to 26%, the refinance share rose to more than 44% — the highest share since last September, MBA reported on Wednesday.
But the overall volume of 1003s decreased 5% for the week ending Sept. 22, as refinance requests reversed the notable rise reported last week by falling 4% and purchase money application activity declined about 6%, MBA added.
Coco Salazar is an assistant editor and staff writer for MortgageDaily.com.e-mail: MortgageWriter@aol.com
7 Refinance Strategies
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:...