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While rates are almost unchanged from a year ago, applications are off way off last year’s levels — highlighting that the ride on the way down is nowhere near as good as it was on the way up.
The Market Composite Index, a measure of purchase and refinance mortgage applications, increased 4.5% from the previous week to 599.9, said the Mortgage Bankers Association of America in its latest Weekly Mortgage Application Survey. A year ago, applications were stacked nearly twice as high as this index stood at 1182.3. All application type indexes increased. The Refinance Index led the way, moving up 6.8% from the prior week to 1755.4, the Washington D.C.-based group reported. Accordingly, the refinance share of total applications nudged up to 49.7%. The Government Index was also up, increasing 5.2%, while the Conventional Index climbed 4.4% and the Purchase Index rose 2.9%. In this week’s Primary Mortgage Market Survey, Freddie Mac averaged the 30-year fixed-rate mortgage at 5.87%, almost unchanged from last week’s 5.85%. Last year at this time the average was 5.95%. The 15-year also edged up 2 basis points to 5.17%, said Freddie. The mortgage giant reported that the average for one-year Treasury-indexed adjustable-rate mortgages (ARMs) edged up 0.04% to 3.76%. On the other hand, the latest Cost of Funds Index, known as COFI, averaged 1.821%, according to the Federal Home Loan Bank of San Francisco. Both COFI and the 1-year Treasury compete for ARMs, which MBA said accounted for 30.3% of total applications, almost unchanged from the previous week. At Bankrate.com, one financial analyst said “modest inflation remains the lid that keeps mortgage rates below 6 percent,” and added that “mortgage rates may inch higher on positive economic news and speculation about eventual rate hikes.” But a majority, or 64% of the mortgage industry panelists surveyed by Bankrate.com, predict rates will remain unchanged within the next month and a half. The rest of the votes were split evenly on whether rates would head upward (18%) or downward (18%). The 10-year Treasury-note yield closed Thursday at 4.25% with the price ending at 99 29/32 in late afternoon trading today, compared to 4.25% and 99 31/32 reported a week ago. |
Coco Salazar is an assistant editor and staff writer for MortgageDaily.com.
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