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| Loan requests continued to slide even as mortgage rates improved. Interest rates are expected to sink lower in the next few months.
Edging down two basis points from last week, the 30-year fixed-rate mortgage averaged 6.67% this week, Freddie Mac said its survey of 125 mortgage-lending companies, thrifts and commercial banks showed. A year ago, the average was at 6.78%. “Mortgage rates edged down slightly for the second week in a row after having risen over the previous month and a half, and as financial markets prepared for the June 28th Federal Open Market Committee’s announcement on monetary policy,” Freddie commented in an announcement. According to half of the mortgage rate survey respondents at Bankrate.com this week, rates will stay relatively unchanged over the next month and a half or so. One-third predicted a downfall and the rest an upturn. Next quarter, the 30-year will average 6.56% then fall to 6.25% in the last three months of the year, according to Fannie Mae’s latest forecast. The average is expected to stay around the latter level until jumping to 6.45% in the third quarter next year. The 15-year averaged 6.34%, or 3 BPS lower than a week earlier, Freddie said. The benchmark 10-year Treasury yielded 5.09% near midday, about 5 BPS below the level last Thursday. Adjustable-rate mortgage averages slipped 1 BPS from a week ago to 6.30% for 5-year Treasury-indexed hybrid ARMs and to 5.65% for 1-year Treasury-indexed ARMs, Freddie added. The 1-year Treasury bill yield itself, however, rose 5 BPS in a week’s period to 4.97% Tuesday, Federal Reserve data showed. The ARM share remained at one-fifth of all applications, the Mortgage Bankers Association reported in its latest survey announced Wednesday. Mortgage applications have not responded to the lower rates, as volume fell 4 percent in the week ending June 22, led by a 5 percent downturn in purchase money demand and a 3 percent decrease in refinance requests, MBA reported. Applications for government-insured loans sunk by 7 percent during the week. Despite fewer refinance requests, their share of total mortgage applications inched up from the prior week to 39%, MBA said. |
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