|Applications nudged down even as rates fell for the second consecutive week.
Down 9 basis points from a week ago, the 30-year fixed-rate mortgage came in at 6.63%, according to Freddie Mac’s latest Primary Mortgage Market Survey. A year ago, the average was 5.82%.
The average for the 15-year was 6.27%, sliding 7 BPS from last week, Freddie reported.
The 10-year Treasury note yield fell 13 BPS from a week prior to 4.95% at Thursday’s close.
The 5-year Treasury-indexed hybrid adjustable-rate mortgages average was reported at 6.27%, 8 BPS lower than last week.
The 1-year Treasury-indexed ARM average experienced a decrease of 9 BPS to 5.69% this week, Freddie said. The drop was almost similar to the 1-year T-bill, which fell Wednesday to 5.11% from 5.16% a week earlier.
“Second quarter Gross Domestic Product … came in weaker than the market had expected,” commented Frank Nothaft, Freddie chief economist, in an announcement. “This means inflation is less of a threat, and that translates into lower mortgage rates.
“Although lower rates are a welcome sight, we still feel that the 30-year fixed-rate mortgage rate will drift up and down somewhat over the next few months, but will average less than seven percent for the year.“
According to the responses of half of the 100 mortgage “experts” surveyed by Bankrate.com this week, mortgage rates will head up over the next 35 to 45 days. Forty percent of the panelists predicted rates will remain relatively unchanged and the rest believed rates will fall.
Even though mortgage application volume edged down just 1% from the previous week, it was the fourth consecutive weekly decrease, the Mortgage Bankers Association reported on Wednesday. The latest results were due to a 3% decline in purchase money loan demand, as this overshadowed a 2% in crease in refinance requests.
The share of refinances inched up from the prior week to 37%, MBA said, but the ARM share of total applications slipped below 28% — the lowest level since March 2004.
Coco Salazar is an assistant editor and staff writer for MortgageDaily.com. e-mail: [email protected]