Mortgage Rates Continue To Inch Down With One Glaring Exception
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Mortgage rates continued to decline by baby steps as reported
by Freddie Mac in its Primary Mortgage Market Survey. The 30-year fixed-rate
mortgage (FRM) averaged 6.20 percent with 0.5 point during the week ended November
21. The previous week it averaged 6.24 percent with 0.4 point. One year ago
the 30-year averaged 6.18 percent.
The 15-year FRM dropped five basis points from the previous week to an average
of 5.83 percent. Fees and points increased to 0.5 point from 0.4. One year ago
the average interest rate for this product was 5.91 percent. The drop this week
brought the 15 year to its lowest average since early last February
The five-year Treasury indexed hybrid adjustable rate mortgage (ARM) dropped
to 5.88 percent from 5.96 percent with points increasing from 0.4 to 0.5. One
year ago the 5-year ARM averaged 5.99 percent.
One-year ARMs lost eight basis points from the average of 5.50 one week earlier.
Points and fees increased to 0.6 point from 0.5. This was the low for the one-year
ARM since it averaged 5.4 percent during the week ended March 22. One year ago
the average was 5.49 percent.
"Both the producer price index and the consumer price index remained contained
in October while industrial production fell," said Frank Nothaft,
Freddie Mac vice president and chief economist. "This allowed interest rates
for the 30-year FRM to decline to the lowest levels since early May 2007 and
the 15-year FRM to fall to a level not experienced since early last year.
"The housing market remains weak, continuing to be a drag on the economy.
For instance, single-family housing starts fell 6.4 percent in October to 917,000
units (annualized), the slowest pace since September 1991, nearly 25 percent
below that of October 2006. Additionally, homebuilder confidence in November
remained at the lowest level on record."
The Weekly Mortgage Applications Survey conducted by the Mortgage
Bankers Association for the week ended November 23 showed a strange pattern
in interest rate changes.
The average contract interest rate for 30-year FRMs decreased to 6.09 percent
with 1.07 points including the origination fee from 6.18 percent with 1.01 points
a week earlier. The 15-year FRM dropped two basis points to 5.69 percent with
points increasing to 1.13 from 1.12. However, the one-year ARM showed an increase
in the average rate of a whopping 26 basis points, averaging 6.24 percent for
the week with points increasing to 0.96 from 0.89.
Mortgage application volume decreased 4.3 percent on a seasonally and holiday
adjusted basis from the previous week and 25.5 percent on an unadjusted basis
which reflected the Thanksgiving holiday shortened week. Application volume,
however, was 24.6 percent higher than the same week one year earlier.
Refinancing as a share of overall mortgage activity decreased to 45.8 percent
from 50.3 percent the previous week and the market share of adjustable rate
mortgages dropped to 14.6 percent of total applications from 15.8 percent the
week before.
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