Long term mortgage interest rates as reported by Freddie Mac in its Primary Mortgage Market Survey were virtually unchanged during the week which ended April 17. However, long term rates as reported by the Mortgage Bankers Association in their Weekly Mortgage Applications Survey for the week ended April 18 underwent significant upward movement.

First the Freddie Mac report. The 30-year fixed-rate mortgage (FRM) averaged 5.88 percent for the third straight week. Fees and points remained unchanged at 0.4 for the second week in a row.

The 15-year FRM averaged 5.40 percent, a decline of 2 basis points. Fees and points increased from 0.4 to 0.5.

Short-term adjustable rates showed a little more activity. The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 5.48 percent with 0.6 point. The previous week it had averaged 5.56 percent with 0.7 point. The one-year Treasury-indexed ARM was down 8 basis points to 5.10 percent. Fees and points were also down from an average 0.7 to 0.6 point.



"Interest rates for fixed-rate mortgages held relatively steady for a second week, while ARM rates continued to decline amid market speculation that the Federal Reserve (Fed) may cut rates again at its upcoming Committee meeting," said Frank Nothaft, Freddie Mac vice president and chief economist. "March's housing starts were the lowest since March 1991 and consumer sentiment in April fell to a 26-year low while homebuilder confidence remains near record lows. Currently, the federal funds future contracts suggest nearly a 100-percent probability that the Fed will cut rates at the end of this month.

"In its current regional review released on April 16th the Fed noted 'reports on real estate and construction were generally anemic for the residential sector' and 'economic conditions have weakened since its last report.' In addition, San Francisco Fed Bank President suggested, 'the economy has all but stalled and could even contract over the first half of the year' in a speech the same day and that the downside risks to growth are significant."

According to the MBA survey, the two long term rates it tracks were both up over 30 basis points. The average contract interest rate for 30-year FRMs went from 5.74 percent during the previous week to 6.04 percent with points, including the origination fee, decreasing from 1.05 to 1.04.

The average contract interest rate for 15-year FRMs jumped to 5.6 percent from 5.27 percent with points decreasing to 1.06 from 1.19.

The one-year ARM, however, decreased, moving from 7.02 percent to 6.93 percent with points increasing to 1.38 from 1.28.

Application volume decreased 14.2 percent on a seasonally adjusted basis from one week earlier and was down 13.4 percent when unadjusted. The application volume was 3.2 percent lower than during the same week in 2007.

Applications for refinancing as a share of all mortgage activity decreased to 49.2 percent from 53.5 percent the week before while applications for adjustable rate mortgages were virtually non-existent, representing 6.6 percent of all applications. Still this was a slight improvement over the 6.0 percent market share one week earlier.