| You Can Go Your Own Way
Rates average higher and lower, directions differ June 20, 2003 By ANNE LINEBERRY |
| Mortgage rates acted independently of each other this week, according to lending giant Freddie Mac.
In its Primary Mortgage Market Survey, Freddie reported rates as steady for the 30-year fixed, staying at 5.21% for the week. This rate matches the record low set last week. The 15-year fixed rate ended up a smidgen, averaging 4.62% for the week, up two basis points from the prior week. Both rates carried 0.6 discount points. This time last year, 30-year rates averaged 6.63 and 15-year rates averaged 6.08 percent, Freddie said. One-year Treasury-based adjustable-rate mortgages (ARMs) hit another record low, dropping to 3.51 percent, the survey reported. The rate is four basis points lower than last week and more than a point lower than the comparable week last year’s average of 4.60 percent, Freddie said. Refinances comprised 77.3 percent of all applications, said the Weekly Mortgage Applications Survey of the Mortgage Bankers Association of America (MBA). This share is slightly higher than the prior week. The survey also reported a slight rise in ARMs as a share of applications. MBA’s Market Composite Index of mortgage loan applications increased for the week ended June 13, closing at 1701.7 on a seasonally-adjusted basis, up from 1684.6 the prior week. All separately calculated indices, including the conventional, purchase and government indices finished higher compared to the prior week, according to the survey. The refinance index also finished the week up, MBA said, closing more than 100 points higher than the prior week and measuring 9162.7. Ten-year Treasury bond yields finished higher on Thursday, closing at 3.34. Last week the 10-year yields finished at 3.15. The MBA predicts that treasuries will be up to 4 percent by the end of the year. This would result in increasing mortgage rates. Other indicators also have industry experts forecasting mortgage rates to rise slowly in the coming months. In his weekly commentary, Freddie’s chief economist Frank Nothaft pointed to the Consumer Price Index’s stability as an indicator that the risk of deflation is low. This factor, strong housing starts and other factors culminated in his opinion that “the economy is ready to pick up growth.” “The down side of a growing economy, however, is that mortgage rates typically will begin to rise, although our forecast doesn’t call for any rapid increases in the near future,” he said. At Bankrate.com, experts were evenly divided, with 40 percent predicting a rise in rates next week and 40 percent predicting a decrease. Twenty percent were undecided. |
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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 [email protected] |
