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Mortgage rates dropped almost by a quarter percentage and home loan applications bumped up.
The average for the 30-year fixed-rate mortgage fell 20 basis points (BPS) from the previous week to 5.83%, according to Freddie Mac’s latest Primary Mortgage Market Survey. Last year at this time, the average was the same as the previous week’s 6.03%. Down 22 BPS, the 15-year averaged 5.17%, said Freddie. “Over the past week, several high ranking Federal Reserve officials gave speeches indicating that inflation remains a non-event,” stated Freddie’s chief economist Frank Nothaft in the announcement. “One official even suggested the possibility that inflation might go even lower is more of an issue for the Fed at the moment. Consequently, the bond market rallied and this caused mortgage rates to fall.” The 10-year Treasury note closed Thursday at 100 26/32, while the prior week it was reported at 99 26/32. The yield at 4.15%, was down 0.12% from last week. As for mortgage applications, the overall measure increased 5.9% from the previous week — bringing the Market Composite Index to 663.2, according to the Mortgage Bankers Association of America’s (MBAs) most recent Weekly Mortgage Application Survey. The pace of mortgage applications was almost double a year ago when the index stood at 1200.2. Purchase money applications contributed to the overall increase as the Purchase Index jumped 13.5% to 425.9, reported the MBA. The Refinance Index continued it decline, falling 1.9% from the prior week to 2043.9. A year ago, the measure of refinance mortgage applications was more than triple at 6174.1. The refinance share of total applications fell nearly three percent to 48.1%. The adjustable rate mortgage (ARM) share of activity inched up from 26.6% the previous week to 27.5% — the highest level since March 2000, according to MBA. Meanwhile, Freddie said the average for one-year Treasury-indexed ARMs edged down to 3.72%. “Our latest economic forecast calls for low inflation into the next year and as long as that holds true, there will be little upward pressure that might force interest rates significantly higher,” said Nothaft. Meanwhile, at Bankrate.com, half the panel of mortgage industry experts predicted that in the next 40 to 45 days mortgage rates will go down, 37% predicted an upturn and 13% voted that they’d remain unchanged (plus or minus 2 BPS). |
Coco Salazar is an assistant editor and staff writer for MortgageDaily.com.
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