|Application activity was steady as rates tumbled on news that the economy is moderating.
The 30-year fixed-rate mortgage averaged 6.72%, sliding 8 basis points from last week, according to Freddie Mac’s latest Primary Mortgage Market Survey. A year ago, the average was 5.77%.
“Mortgage rates drifted lower this week on indications that economic growth is moderating, inflation remains under control and the Fed just may pause raising rates for awhile,” commented Frank Nothaft, Freddie chief economist, in the written statement.
Bankrate.com’s survey of 100 mortgage brokers, bankers and other individuals indicated rates have reached a plateau but the move will be upward if there is a change over the next 35 to 45 days; 44 percent of the panelists said rates will rise, an equal amount believed rates would remain relatively unchanged and only 12 percent foresaw a decrease.
Fannie Mae’s July outlook has the 30-year averaging 6.75% for the quarter and holding at 6.80% until the fourth quarter 2007. This is a much slower pace than the forecasts of Freddie and the Mortgage Bankers Association, which respectively expect that the average next quarter will be 6.80% and 6.90%.
The 15-year stepped down 7 BPS over the past week to 6.34%, Freddie said.
Long-term mortgage rates have yet to follow the direction of the 10-year Treasury note, which yielded 5,08% Thursday afternoon, 5 BPS higher than a week ago.
Treasury-indexed adjustable-rate mortgages with a hybrid, 5-year term edged down 1 BPS from a week ago to an average of 6.35% while 1-year ARMs slipped 2 BPS to 5.78%, Freddie reported. As of Wednesday, the 1-year T-bill itself stood at 5.16%, dropping 6 BPS from a week earlier, according to Federal Reserve data.
The volume of mortgage applications came in about 1 percent lower than in the prior week, as a 2-percent downturn in demand for money to purchase a home overshadowed the 1-percent increase in refinance requests, MBA reported.
The trade group reported the refinance share edged up from the previous week to 36% while for ARMs remained at 29%.
Coco Salazar is an assistant editor and staff writer for MortgageDaily.com. e-mail: [email protected].com