Mortgage Rates and Application Rates Both Mixed at the End of January
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Mortgage rates assumed a split personality again this past
week with Freddie Mac showing moderate increases and the Mortgage Bankers Association
reporting similar movement in the opposite direction.
Freddie Mac's Primary Mortgage Market Survey for the previous week reported
that the 30-year fixed-rate mortgage (FRM) increased from 6.25 percent the previous
week to 6.34 percent. This was the highest the 30-year has been since the 6.40
percent recorded last October. Fees and points were unchanged at 0.4.
The Mortgage Bankers Association's Weekly Mortgage Applications
Survey for the previous, however, reported that the 30 year FRM decreased 6
basis points to 6.23 percent with points, including the origination fee, increasing
from 1.07 to 1.09.
Freddie Mac's survey indicated that the average rate for a 15-year FRM
was 6.06 percent, up from the average of 5.98 the previous week. One year ago
the 15 year averaged 5.81 percent. The most recent rate was, again, the highest
since October 26 when it was 6.10 percent. Fees and points were unchanged at
0.4.
MBA reported the 15-year FRM in their survey averaged 5.96 percent compared
to 6.01 percent for the week ended January 26 with points increasing to 1.1
from 1.07.
The one-year Treasury indexed adjustable rate mortgage (ARM)
had an average contract rate of 5.54 percent in the Freddie Mac survey compared
to 6.0 percent the previous week. There was a big jump in fees, from 0.5 to
0.7. At this time last year the one-year ARM averaged 5.33 percent.
MBA's survey on the other hand indicated a slight decrease in the one-year,
from 5.86 percent to 5.84 with points declining to 0.78 from 0.83.
Freddie Mac's survey is the only one to track the five-year Treasury-indexed
hybrid adjustable-rate mortgage which averaged 6.04 percent with 0.6 point,
up from last week when it averaged 6.00 percent. A year ago, the 5-year ARM
averaged 5.87 percent.
Frank Nothaft, Freddie Mac vice president and chief economist commented that
"Interest rates moved higher following the latest upbeat economic news.
The strong 3.5 percent annualized growth in the economy over the final quarter
of 2006 occurred while inflation moderated. Solid economic growth and tepid
inflation contributed to the Fed's decision to leave the target short-term interest
rate unchanged."
"The Fed indicated in its statement that there are some tentative signs
of stabilization that have appeared in the housing market. December's existing
and new home sales confirmed that 2006 was a year of significant decline in
housing activities, but 2006 was still in the top three years for total home
sales."
The Mortgage Bankers Association reported that mortgage application
volume was down fractionally on an unadjusted basis, a decrease of
0.2 percent but increased 3 percent on a seasonally adjusted basis. It was also
up 1.4 percent from the same week in 2006.
Refinancing declined, representing 46.1 percent of all mortgage applications
compared to 47.4 percent the previous week but ARMs grabbed a 22.3 percent mortgage
share, up from 21.37 percent one week earlier.
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