The interest rates on fixed rate mortgages (FRM) were up during
the week ended February 14 according to the results of Freddie Mac's Primary
Mortgage Market Survey.
The 30-year FRM increased to 5.72 from 5.67 the previous week with fees and
points unchanged at 0.4. One year ago the 30-year FRM averaged 6.30 percent.
The 15-year FRM averaged 5.25 percent with 0.4 point compared to 5.15 percent
with 0.4 point a week earlier. During the same week in 2007 the average interest
rate was 6.03 percent.
Adjustable rate mortgages (ARMs
), however, inched slightly
lower. The rate of a five-year Treasury-indexed hybrid ARM was down two basis
points to 5.19 percent. Fees and points for this product were also unchanged
at 0.4. One year ago the five-year hybrid averaged 6.01 percent.
One-year Treasury-indexed ARMS which averaged 5.03 percent with 0.5 point during
the week ended February 7 declined slightly to 5.0 percent with 0.4 point. At
this time last year that product averaged 5.52 percent.
Freddie Mac vice president and chief economist commented on the rates; "This
week was relatively light on the number of economic data releases, which painted
a mixed picture regarding the current state of the economy. On a positive note,
labor productivity rose higher than market forecasts in the fourth quarter of
2007 while gains in labor costs slowed. However, pending existing home sales
fell for the second month in December, indicating further weakness in home sales
for January and February. As a result, mortgage rates were roughly unchanged
"These historically low mortgage rates and declining house prices contributed
to the highest housing affordability in December since March 2005, according
to the National Association of Realtors®. However, with banks continuing
to tighten lending standards, fewer families will likely have an opportunity
to take advantage of these factors."
The Mortgage Bankers Association (MBA) Weekly Mortgage Applications Survey
for the week ended February 15 revealed a similar pattern for fixed rate loans,
but the changes were much more pronounced.
The average contract interest rate for 30-year fixed-rate mortgages jumped
37 basis points to 6.09 percent with points, including the origination fee,
decreasing to 1.10 from 1.15.
The average contract interest rate for 15-year fixed-rate mortgages increased
to 5.55 percent from 5.18 percent, with points unchanged at 1.08.
The only adjustable rate product tracked by the MBA, the one-year ARM remained
unchanged at 5.72 percent, with points increasing to 0.91 from 0.90.
Mortgage application activity dropped 22.6 percent from the
previous week on a seasonally adjusted basis and 21.2 percent unadjusted. Volume,
however, was still 33.9 percent higher than it had been the same week one year
Applications for refinancing as a percentage of all mortgage applications decreased
to 61.7 percent from 67.4 percent a week earlier while the market share of adjustable
rate mortgages rose to 12.8 percent from 9.9 percent the previous week.