|Five weeks of falling rates failed to lift loan applications.
Sliding four basis points from last week to the lowest level since early April, the 30-year fixed-rate mortgage average came in at 6.44%, according to the announced results of Freddie Mac’s latest Primary Mortgage Market Survey. At this time a year ago, the average was 5.71%.
“Mortgage rates continued to drift lower this week in large part because of the cooling in the housing market and in consumer confidence, thus giving financial markets reason to believe that economic growth will moderate and inflation will remain in check,” said Frank Nothaft, Freddie chief economist, in the announcement. “As a matter of fact, the 30-year [fixed rate mortgage] is nearly 40 basis points lower than its peak of 6.8 percent in July of this year.”
For the next quarter, the most recent forecasts of Freddie, Fannie Mae and the Mortgage Bankers Association have the 30-year average rising to 6.6% on the low end and 6.8% on the high end.
Over the next 35 to 45 days, only 14 of the 100 mortgage “experts” surveyed by Bankrate.com this week saw a downturn in rates and the rest were evenly divided on whether they’d go up or remain relatively unchanged.
The average 15-year fell 4 BPS from last week to 6.14%, Freddie reported.
The yield on the 10-year Treasury, a benchmark for fixed mortgage rates, closed today at 4.73 percent, 7 BPS better that last week.
The 5-year Treasury-indexed hybrid adjustable-rate mortgage average was reported at 6.11%, or 3 BPS lower than a week ago.
The average 1-year Treasury-indexed ARM decreased 3 BPS to 5.59%, the survey said. The 1-year T-bill, at 5.03% Wednesday, fell 4 BPS from a week earlier, Federal Reserve data showed.
Reversing three consecutive weekly upturns, mortgage application volume nudged down 1% for the week ending Aug. 25, as the 2% decrease in purchase money demand, which is at the lowest level since November 2003, overshadowed a slight increase in refinance requests, MBA reported.
The refinance and ARM share of mortgage activity respectively inched up from the prior week to nearly 42% and 27%, MBA said.
Coco Salazar is an assistant editor and staff writer for MortgageDaily.com.