|As rates continued their ascent, one economist believes they’ll veer from this course in the next few weeks.
The average for the 30-year fixed-rate mortgage increased seven basis points within the past week to 5.69%, according to Freddie Mac’s latest survey of 125 mortgage-lending commercial banks, thrifts and companies. The current level is above 5.58% reported a year ago.
The 15-year reportedly climbed 8 BPS to 5.22% this week.
The average for 5-year Treasury-indexed hybrid adjustable-rate mortgage was unchanged from last week at 5.05%, Freddie said.
Meanwhile, the 1-year ARM nudged up 1 BPS during the prior seven days to a reported 4.16%.
“Mortgage rates moved up for the second week in a row on concerns about a pick up in inflation showing up in raw materials,” commented Freddie chief economist Frank Nothaft in a written statement. “However, a broader measure of inflation, the Consumer Price Index, posted a less than expected rise in inflation, causing bond yields to fall. This means that next week’s survey results may retreat to prior levels of a week or two ago.”
The Labor Department released CPI data early morning Wednesday, which is the last day Freddie collects data for its weekly survey.
The 10-year Treasury note yielded 4.28% and had a price of 97.66 at the market’s close Thursday. Early last Friday, the note traded at a price of 97.88 and 4.26% yield.
Straying from Nothaft’s projection, 72% of the 100 industry bankers, brokers and other individuals Bankrate.com surveyed this week believe rates will continue upward over the next 35 to 45 days and the rest were evenly split among those who think rates will fall (14%) and those who predict they’ll remain about the same.
The higher rates for the week ending Feb. 18 resulted in a 1% decrease in the measure of loan volume, bringing the Market Composite Index to 727.9, the Mortgage Bankers Association reported.
The lower level was reportedly due to a 1.3% drop in purchase loan requests during the week as refinance activity was unchanged.
The refinance share of applications remained near half and the ARM share near 31%, MBA said.
Coco Salazar is an assistant editor and staff writer for MortgageDaily.com.email: firstname.lastname@example.org
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