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Average 30-year 6.16%

April 26, 2007

By COCO SALAZAR

photo of Coco Salazar
Mortgage applications improved as rates slipped for the second consecutive week.

The 30-year fixed-rate mortgage averaged 6.16%, nudging down 1 basis point from last week, according to Freddie Mac’s latest Primary Mortgage Market Survey. The 30-year averaged 6.58% at this time last year.

“Recent economic data releases showing weaker existing home sales in March, coupled with lower consumer confidence in April, caused the market to pause and reevaluate the potential growth of the economy this year,” said Frank Nothaft, Freddie chief economist, in an announcement. “This allowed all mortgage rates to decline slightly this week.”

The 15-year averaged 5.87%, edging down 2 BPS from a week ago, Freddie said.

At 4.67% near midday, the 10-year Treasury note yield was unchanged from 4.67% a week earlier.

Sliding 4 BPS from a week earlier to 5.88% was reportedly the 5-year Treasury-indexed hybrid adjustable-rate mortgage average.

While Freddie said the 1-year Treasury-indexed ARM average dipped 2 BPS within the past seven days to come in at 5.43%, Federal Reserve data showed the 1-year T-bill itself fell 5 BPS from the previous week to 4.88% on Tuesday.

The Mortgage Bankers Association reported in its own survey the ARM share remained at 18%.

Mortgage rates are destined to stay relatively unchanged over the next month and a half, according to 57 of the 100 mortgage industry brokers, bankers and individuals surveyed by Bankrate.com. Another 38 forecast rates will fall, and the remaining panelists predicted an upturn.

MBA’s latest forecast, however, forecast the 30-year to average 6.4% through the next quarter then move up to 6.5% by the fourth quarter. Freddie’s April outlook has the average at 6.2% and 6.3% for those same periods.

An increase of 4 percent in both purchase money and refinance requests pushed up the overall volume of 1003s by that same percentage during the week ending April 20, MBA’s latest Weekly Mortgage Application Survey showed.

Two programs announced today have the potential to boost future applications.

Washington Mutual Inc. announced the WaMu Mortgage Plus home loan — a new loan program that gives borrowers the ability to reset the interest rate on the mortgage twice a year to either fixed or variable rates, and a choice of interest-only or fully amortized payments. The product combines a first mortgage and home equity line-of-credit into a single loan and features no closing fees.

Meanwhile, Primary Mortgage Capital launched a new Jumbo Alt-A loan that goes as high as $6 million. The program offers extended loan-to-values, a float-down option and the ability to fund non-warrantable condos.

The refinance share of mortgage activity ticked down from the previous week closer to 43%, MBA said.

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