Freddie Mac's Weekly Primary Mortgage Survey for the week ended November
23 recorded the first drop in mortgage rates since September 1. 2005. Over the
13 week run-up the 30 year fixed rate mortgage increased from 5.71 percent to
the 6.37 percent recorded for the week ended November 17. Last week the rate dropped
to 6.28 percent, the lowest since October 27, with fees and points remaining constant
This follows on the heels of a reduction in rates reported last week by the Mortgage
Bankers Association. MBA recorded a second straight week of rate decreases in
its weekly report issued on November 30.
But first, Freddie Mac.
The 15-year fixed rate mortgage also declined nine basis points
to 5.81 percent with fees constant at 0.6. The 5-1 ARM declined from 5.86 percent
to 5.75 percent but fees and points jumped to 0.8 from 0.6. While this is the
high water mark for these fees it is the third time this year that the figure
has climbed to this point.
The 1-year ARM dropped to 5.14 percent from 5.20 percent the previous week and
fees rose from 0.6 to 0.7.
The Mortgage Bankers Association showed smaller decreases in their Mortgage Applications
Survey for the week ended November 24, but coupled with the changes recorded the
previous week, are still showing most average rates at lower levels than those
reported by Freddie Mac.
The average contract interest rate for 30-year fixed-rate mortgages decreased
six basis points to 6.20 percent, with points (including the origination fee)
increasing to 1.17 from 1.11 for 80 percent loan-to-value (LTV) ratio loans.
15-year fixed-rate mortgages decreased to 5.72 percent from 5.83 percent, with
points increasing to 1.26 from 1.12.
MBA reports figures higher than those of Freddie Mac only on the 1-year
ARM and here there is a considerable discrepancy. The MBA survey shows
that rate decreasing to 5.39 percent from 5.41 percent one week earlier, with
points decreasing to 0.96 from 0.99. A 25 basis point difference between the
two surveys must be among the highest seen in recent memory.
It was a short week and one in which Americans were not necessarily thinking about
mortgages so it was not surprising the application volume was down. The decrease
on a seasonally adjusted basis was 1.8 percent from the previous week and 8 percent
from the same week in 2004. MBA does further adjust figures to account for the
Refinancing as a share of total mortgage activity decreased
again to 39.1 percent from 39.9 percent the previous week and the ARM share
of the market dropped slightly from 33.2 to 33.0 percent of all applications.