Mortgage rates barely budged during the week ended July 6
and July 7. While the average contract rate of most products moved up, changes
were virtually imperceptible, perhaps lending further credence to Freddie Mac's
projection in its July Economic Outlook that rates would "continue to bounce
The average rate for a 30-year fixed rate mortgage was up one basis point to
6.79 with fees and points unchanged for the fifth straight week at 0.5. The
15 year also increased one basis point to 6.44 percent with fees and points
unchanged at 0.5. Average rates for the 5/1-year ARM were unchanged at 6.39
percent although fees and points moved from 0.5 to 0.6. The 1-year ARM averaged
5.83 and 0.8 in fees and points. The rate here increased 1 basis point while
fees and points were unchanged.
The Weekly Mortgage Applications Survey from the Mortgage Bankers Association
showed similar mini-movements. The 30-year fixed-rate loan averaged 6.81 percent
compared to 6.80 percent the previous week Points, including the origination
fee, were down to 1.06 from 1.13 during the week ending July 1.
15-year fixed-rate mortgages declined from 6.41 to 6.40 points but points moved
upward to 1.17 from 1.12. The one-year ARM decreased two basis points to 6.40
with points going up to 1.17 from 1.12.
All averages are based on 80 percent loan to value originations.
Loan applications were up 1 percent on a seasonally adjusted
basis but down 29.1 percent on an unadjusted basis from one week earlier. The
decrease might be accounted for by the fact that the Tuesday Fourth of July
observance created a virtual four day weekend. Applications continue to be way
off of 2005 volumes and were down 36.3 percent from the same week in 2005.
Refinancing decreased 1 percent to 34.0 from a week earlier and the share of
adjustable rate mortgages to total applications were off to 28.7 percent from
29.5 the previous week.
Frank Nothaft, Freddie Mac vice president and chief economist, attributed the
shallow activity to the fact that the Federal Reserve's rate increase
came as no great surprise. "This is fairly consistent with out economic
outlook which continues to forecast that interest rates for the 30-year fixed
rate mortgage will gradually drift upward."