Mortgage Rates Take A New Year Holiday
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Mortgage interest rates were virtually unchanged during the
first week of 2007 according to Freddie Mac's weekly Primary Mortgage Market
Survey. The Mortgage Bankers Association (MBA) survey, however, showed some
fairly significant changes among its survey respondents.
According to Freddie Mac, the 30-year fixed rate mortgage (FRM) averaged 6.18
percent with an average of 0.4 point for the week ended January 4. This was
the same rate reported for the week ended December 28 and 3 basis points lower
than the first week in January 2006.
The MBA's Weekly Mortgage Applications Survey, however, reported that
the average contract interest rate for the 30-year FRM declined from 6.22 percent
to 6.13. Points including the origination fee increased to 0.94 from 0.92
Freddie Mac reported that the 15-year FRM carried an average interest rate of
5.94 percent with 0.4 points, an increase of one basis point from a week earlier.
A year ago this product averaged 5.76 percent.
Other Freddie Mac statistics included an average rate of 6.02 percent for the
five-year Treasury-indexed hybrid ARM with 0.4 point compared to 5.98 with 0.4
points a week earlier and an average of 5.42 percent with 0.6 points for the
one-year Treasury-indexed ARM, down five basis points from the last week in
December. One year ago this product averaged 5.16 percent.
"Interest rates were flat this past week, reflecting the mixed messages
from recent economic indicators," said Frank Nothaft,
Freddie Mac vice president and chief economist. "The recently released
manufacturing report showed improvement, and while construction spending for
November was down, it was still better than expected. On the other hand, a private
sector employment report suggested that the labor market was weaker than anticipated.
As a result, 30-year fixed-rate mortgage rates started off the year at about
the same level as this time last year.
Other results reported by MBA included an average for the 15-year FRM of 5.85
with 0.98 points, down from an average of 5.93 percent with 1 point.
The average contract interest rate for one-year ARMs decreased to 5.79 percent
from 5.84, with points unchanged at 0.83.
According to MBA mortgage loan application volume was up 16.6
percent on a seasonally adjusted basis from one week earlier and 33.2 percent
when unadjusted. Volume was running 12 percent higher than during the same week
in 2006.
Refinancing as a percent of overall mortgage activity increased
to 48.4 percent from 48.1 percent the previous week and, reflecting the findings
of the Freddie Mac ARM survey, adjustable-rate mortgages pulled only 20.1 percent
of overall activity compared to 20.4 percent the previous week. This is the
lowest market share for ARMs since July 2003.
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