|Another decrease in mortgage rates helped sustain mortgage demand.
The 30-year fixed-rate mortgage average slid for the fifth consecutive week — to 6.48% from 6.52% seven days earlier, Freddie Mac said its latest Primary Mortgage Market Survey. Last year at this time, the average was at 5.77%.
“The Fed has acknowledged that it is closely monitoring the housing market as it slows down from last year’s record pace,” said Frank Nothaft, Freddie vice president and chief economist, in an announcement. “Although this fuels arguments about whether we will experience a soft landing or a bursting housing bubble, market watchers also perceive that it possible that the Fed may stop raising short-term interest rates over the near term. This perception takes upward pressure off mortgage rates.”
The slowdown in the housing market was confirmed by existing and new home sales in July, as they fell below market expectations, Nothaft added.
Fannie Mae expects the 30-year to average 6.67% this quarter and go down to 6.61% by yearend. The Mortgage Bankers Association, however, sees it going up to 6.7% next quarter and Freddie to 6.8%, according to the groups’ latest forecasts.
While a quarter of the 100 mortgage “experts” surveyed by Bankrate.com this week believed mortgage rates would fall over the next 35 to 45 days, the rest were evenly split as to whether they’d rise or remain relatively unchanged.
The average 15-year fixed rate reportedly came in at 6.18%, just 2 BPS below last week.
The benchmark for long-term mortgage rates, the 10-year Treasury note, yielded 4.80% Thursday afternoon, down 7 BPS from a week ago.
The 5-year Treasury-indexed hybrid adjustable-rate mortgage average fell 4 BPS from last week to 6.14%, Freddie said.
Sliding 5 BPS within a week to a reported 5.60% was the average 1-year Treasury-indexed ARMs. The 1-year T-bill itself, at 5.07% Wednesday, fell 0.01% from a week earlier, Federal Reserve data indicate.
The volume of mortgage applications ticked up from the prior week, as a 1% increase in refinance requests overshadowed a 1% decline in purchase money loan applications, MBA reported.
The refi share of mortgage activity continued upward to 41%, MBA said, while the share of ARMs ticked down from the previous week to 26% — the lowest level since February 2004.
Coco Salazar is an assistant editor and staff writer for MortgageDaily.com.e-mail: MortgageWriter@aol.com