Most mortgage rates retreated ever-so-slightly during the week ended February 23, 2006 according to the Weekly Primary Mortgage Market Survey conducted by Freddie Mac and the Weekly Mortgage Applications Survey for the week ended February 24 which was released Wednesday by the Mortgage Bankers Association.
Freddie Mac reported that the average 30-year fixed rate for the week was 6.26, a decrease of two basis points since the previous week. Fees and points, however, increased 0.1 to 0.6. The 15-year fixed rate was also down two basis points to 5.89 percent but fees and points
were up to 0.6 from 0.5.
The greatest change was in the 1-year ARM which dropped from 5.36 percent to
5.32 percent with fees and points remaining unchanged at 0.7. The 5/1-year ARM
was the only product with a rate increase, from 5.95 percent to 5.96 with fees
and points increasing from 0.5 to 0.6.
The MBA survey showed a rare degree of agreement with Freddie Mac. Its survey
showed that the average 30-year fixed rate mortgaged decreased to 6.18 percent
from 6.22 percent the previous week with points, including the origination fee,
declining from 1.23 to 1.19 for 80 percent loan-to-value ration loans.
The average contract interest rate for 15-year fixed rate mortgages dropped
from 5.87 to 5.84 percent but points increased to 1.24 from 1.21.
The one-year ARM, however, increased four basis points to 5.64 percent. An
obvious misstatement in the MBA report makes us reluctant to report on its estimation
of points. Suffice it to say that, up or down, the change was barely worth mentioning.
Activity in the mortgage markets decreased slightly as measured
by MBA's Market Composite Index. Loan application volume was down1.2 percent
on a seasonally adjusted basis from the week ended February 17 and, on an unadjusted
basis it declined 9.6 percent. The seasonal adjustment takes into account the
shortened work week occasioned by the long Presidents' Day holiday while the
unadjusted figure does not. Activity was down sharply from the same week in
2005, declining almost 19 percent.
Refinancing as a share of overall activity declined again to 38.1 percent from
38.2 percent the previous week and adjustable rate mortgages claimed 28.3 percent
of the market as compared with 29.1 percent the previous week.