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Applications declined despite three weeks of descending rates — which one economist doesn’t consider a trend.
The average for the 30-year fixed-rate mortgage sank 11 basis points from last week to 5.80%, according to Freddie Mac’s latest survey of 125 mortgage-lending thrifts, commercial banks and companies. Compared to a year ago, the average is 14 BPS lower. Descending 10 BPS within the past week, Freddie said the 15-year averaged 5.36%. The 5-year Treasury-indexed hybrid adjustable-rate mortgage average reportedly fell 9 BPS to 5.22%. Even the 1-year Treasury-indexed ARM average, which was the only average that reported a rise last week, slipped four BPS in the last seven days to 4.26%. “Interest rates in general have been oscillating with every piece of economic news released lately,” commented Freddie chief economist Frank Nothaft in a written statement. “The market is switching its focus between the strength of the economy and the fear of inflation.” Near midday, the 10-year Treasury note traded with a 4.27% yield, down from 4.37% a week ago but up nine BPS for the day. The price, at 97.78, went up from 96.75 last week. But, although rates have dropped for a few weeks “that doesn’t necessarily indicate a trend,” Nothaft added. Six out of 10 of the industry bankers, brokers and other individuals surveyed this week at Bankrate.com predicted rates will rise over the next 35 to 45 days, while the rest forecasted a downturn. But lower rates did not translate into more 1003s. Application activity fell 2%, with refinance requests and purchase money applications falling by that same amount, pushing the Market Composite Index down to 672.6, according to the Mortgage Bankers Association’s latest Weekly Mortgage Applications Survey for the week ending April 15. The measure of loan applications a year ago was reportedly 744.5. The refinance share of total mortgage applications edged down during the past week to 38.0, MBA said, while the ARM share slipped to 35%. |
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Coco Salazar is an assistant editor and staff writer for MortgageDaily.com.email: [email protected] |
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