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Rates Stagger, Apps Ease


Mortgage rates rose as fast as they fell recently — abruptly ending a brief refinance wave.

In its Primary Mortgage Market Survey for the week ending Sept. 25, Freddie Mac reported the average 30-year fixed-rate mortgage at 6.09% — 31 basis points higher than the prior week. The 30-year had fallen each week since Aug. 14, when it stood at 6.52%. A year ago, the 30-year stood at 6.42%.

The average 15-year fixed-rate mortgage soared 42 BPS from week earlier to 5.77%, Freddie said.

“Mortgage rates followed Treasury bond yields higher this week amid market uncertainty over the current state of the economy,” Freddie Chief Economist Frank Nothaft explained.

The 10-year Treasury yield was 3.85% near midday — 43 BPS higher than last week, CNNMoney reported.

Just under half of the 100 mortgage bankers, mortgage brokers and other mortgage “experts” surveyed by for the week Sept. 25 to Oct. 1 project further increases in mortgage rates during the next 35 to 45 days. Another 40% expect rates to fall, and 13% see rates staying within 2 BPS of their current levels.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 6.02%, according to Freddie’s survey, climbing 0.35% from the previous survey. The average 1-year ARM was 5.16%, up from 5.03%.

The index for the 1-year ARM, the 1-year Treasury yield, was 1.90% yesterday, climbing from 1.50% seven days earlier, according to data from the U.S. Department of the Treasury. The 6-month London Interbank Offered Rate, which is also used as an ARM index, was 3.47% yesterday, reported. Last week, LIBOR was 3.02%.

ARM share in the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending Sept. 19 was unchanged from the prior week at 4%.

Overall applications fell 11% on a seasonally adjusted basis in MBA’s survey, leaving the Market Composite Index at 591.4. Purchase applications were down 10%, and refinance applications fell 11%. Just over half of applications were for refinances, the same share as last week.

Government loan applications, which MBA noted were largely FHA, fell 9%.

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