|The lack of good or bad financial news kept rates and application activity quiet.
Despite that rates hang near last summer’s lows, the stack of mortgage loan applications grew slightly, as shown by the Market Composite Index, which rose 2.1% from the previous week to 854.5, according to the latest Weekly Mortgage Applications Survey by the Mortgage Bankers Association of America (MBA). A year ago, the index stood at 1142.8.
Trading roles from the prior week, purchase applications rose a little bit more than refinance applications. The Purchase Index increased by 2.3% to 423.5, while the Refinance Index rose 1.9% to 3361.9, said the MBA.
The refinance share of mortgage activity edged down from the previous week to 55.7%. Refinances represented 75.3% of total applications a year ago.
The 30-year fixed rate mortgage remained unchanged from last week’s average of 5.58%, according to Freddie Mac’s latest survey of 125 lending thrifts. Last year at this time, this mortgage rate averaged 5.79%.
Meanwhile, the 15-year edged up 2 basis points (BPS) from last week to 4.89%, said the government-sponsored enterprise.
Freddie reported the 1-year Treasury-indexed adjustable-rate mortgage (ARM) averaged 3.50%, which is down 3 BPS from last week and is at the lowest it has been since July. The ARM share of total applications remained unchanged from the prior week at 27.1%, said MBA. Because application data pertains to data one week behind Freddie’s rates, whether consumers will react to the speech Alan Greenspan delivered Monday highlighting ARM benefits remains to be seen.
While last week the majority of the Bankrate.com’s panel of mortgage industry experts voted rates would remain unchanged, this week the panel was split in their predictions — 50% forecasted an increase in rates the other 50% said rates will remain unchanged (plus or minus 2 BPS).
However, the comments of two panelists indicate rates will remain idle for a while. One said that the absence of inflation will keep rates near historic lows in the near term. The other pointed out that March’s employment report will govern the direction of rates in the next five weeks, but he indicated rates will not drift much because improvement in the trend of “fleeting and unimpressive” job growth “won’t happen overnight.”
At Thursday’s close, the 10-year Treasury note had a yield of 4.03% and price of 99 22/32 — almost unchanged from last week.
Coco Salazar is an assistant editor and staff writer for MortgageDaily.com.