|Job market news led to better mortgage rates, but traffic at mortgage shops did not pick up pace.
The 30-year fixed-rate mortgage averaged 6.28%, a 6-basis-point slide from last week and the first decrease in eight weeks, according to Freddie Mac’s latest survey of 125 mortgage-lending companies, thrifts and commercial banks. A year ago, the average was 6.24%.
The average 15-year nudged down 4 BPS from a week earlier to 6.02%, Freddie reported.
The yield on the 10-year Treasury, a benchmark for long-term mortgages, was 4.73% near midday.
At 5.99%, the 5-year Treasury-indexed hybrid adjustable-rate mortgage average was 5 BPS lower than last week.
The 1-year Treasury-indexed ARM averaged 5.49%, also falling 5 BPS within a week, Freddie said. As of Tuesday, the 1-year T-bill itself was at 5.07%, or 4 BPS lower than a week earlier, according to Federal Reserve data.
“News of moderate employment gains in January led to a halt in the recent upward trend of interest rate movements,” said Frank Nothaft, Freddie’s chief economist, in an announcement. “The 111,000 jobs added last month were fewer than had been anticipated, while the unemployment rate edged up unexpectedly.
“Throughout the year we expect rates on 30-year mortgages to average between 6.3 and 6.5 percent. The flat or increasing rate environment will likely cause the refinance share to contract gradually. In addition, the dollar volume of home equity cashed-out will also retreat from the record level of $314 billion set in 2006 to around $230 billion this year.“
Over the next 30 to 45 days, rates will remain relatively unchanged, according to half of the 100 mortgage “expert” panelists surveyed by Bankrate.com this week. The rest of the panel was evenly split among those who forecast rates will rise, and those who think they’ll fall.
Mortgage application activity was flat for the week ending Feb. 2, as an uptick in refinance requests was overshadowed by a slight decrease in purchase money demand, the Mortgage Bankers Association reported on Wednesday.
The refinance share of mortgage activity edged down from the prior week to 46%, and the ARM share nudged up to 22%, MBA said.
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