|Rates Leave Originators With Time for R&R
Rates rise, Freddie says, while apps continue to drop
August 29, 2003
By ANNE LINEBERRY
|Long-term fixed mortgage rates rose for the second week in a row, according to secondary lender Freddie Mac.
The government-sponsored enterprise, in its Primary Mortgage Market Survey, reported the 30-year fixed rate at a 6.32 percent average, up four basis points from last week and 10 basis points over the same time last year.
The 15-year fixed rate averaged 5.66 percent, Freddie said. Six basis points higher than last week and two basis points over the same time last year, the rate currently carries 0.7 points.
At Bankrate.com, industry experts say that rates will head back down, short term. Among the 42 percent that predicted a backslide, Jason P. Flurry of Planmark Capital Management in Alpharetta, Georgia, had this to say: “…R and R is going to be the main focus for the masses this week, neither of which stands for “Rates” or “Refinance”!”
Bankrate.com’s inhouse reporter and analyst, on the other hand, both think rates will continue to rise, as do 16 percent of those polled. Forty-two percent of the experts think rates will hold for next week.
Applications fell again for the week ended August 22, according to the Mortgage Bankers Association of America (MBA). The Market Composite Index fell to 638.6 on a seasonally adjusted basis, the group said.
This marks the second consecutive week of declines although for the prior week MBA said that the power blackout in the northeast may have contributed to the decline.
All indices except the government index fell, and the government index only rose six-tenths of a point, according to the data. The refinance index fell hard, finishing 21.3 percent lower for the week. The current report marks the eighth in a row that the refinance index has fallen.
Frank Nothaft, chief economist for Freddie, pointed out that, “conventional mortgage applications for home purchases…are only 5 percent below the peak set in mid-May.”
Refinances continue to fall as a share of total mortgage applications, comprising only 48.9 percent during the week.
The share of adjustable-rate mortgages rose slightly, as did the average rate.
Freddie reported the one-year Treasury-indexed ARM average at 3.88 percent, carrying 0.7 points and three basis points higher than the prior week. Freddie said this rate is the highest since Valentine’s Day.
The 10-year Treasury yield closed Thursday at 4.41 percent, off six basis points from last week and off one basis point from last month.
Anne Lineberry is MortgageDaily.com‘s editor. She previously worked as an online editor/producer for DallasNews.com and on the Metropolitan desk for the print edition of The Dallas Morning News. Email Anne at AnneLineberry@MortgageDaily.com
7 Refinance Strategies
Refinance to a lower interest rate: If interest rates have dropped since you took out your original mortgage, refinancing to a lower rate can help you save money on your monthly payments and reduce the overall cost of your loan. Refinance to a shorter loan term:...