Mortgage rates continued to set record 2008 levels with long term rates moving up slightly during the week ended June 26, and short term rates increasing modestly but in double digits.
The information comes from the Primary Mortgage Market Survey released from Freddie Mac as financial markets waited to see the outcome of the Federal Reserve Boards June meeting on interest rates. (The Fed, as expected, left the Federal Funds Rate unchanged at 2 percent.)
The 30-year fixed-rate mortgage (FRM) increased from 6.42 percent with 0.7 during the week ended June 19 to 6.45 percent with 0.6 point last week. This was the highest level for the 30-year since September 6, 2007.
The 15-year FRM averaged 6.04 percent with 0.6 point, up from 6.02 percent with 0.7 point. The June 26 result was the highest level for the 15-year since October 18, 2007.
Five-year Treasury-indexed adjustable-rate mortgages were up 10 basis points from the previous week at 5.99 percent and 0.7 point from 5.89 percent with 0.6 point. The hybrid was last at this level during the week ended October 25, 2007 when it averaged 6.03 percent.
The one-year Treasury-indexed ARM was the only product that did not set a new 2008 high. The 5.27 percent, 0.6 point rate (compared to 5.19 percent also with 0.6 point the previous week) was bested as recently as the week ended May 8 when it averaged 5.29 percent.
"Fixed-rate mortgage rates held relatively stable this week leading up to the June 24-25 Federal Reserve (Fed) Policy Committee meeting," said Frank Nothaft, Freddie Mac vice president and chief economist. "ARM rates, which are typically tied to short-term instruments, rose slightly due to market uncertainty over how the Fed might respond.
"This week's release of the April S&P-Case Shiller' house price indexes offered a few surprises. The decline in the 20-city composite index was less than that in March and eight cities had positive monthly growth in April ' compared to only two cities in March. In addition, May's new home median sales price increased from the prior month, according the Commerce Department. It should be noted, however, that seasonality may have played a factor in these results."
The Mortgage Bankers Association (MBA) Weekly Mortgage Applications Survey for the week ended June 27 reported that the average contract interest rate for 30-year FRMs decreased to 6.33 percent from 6.39 percent with points, including the origination fee, decreasing to 1.09 from 1.12.
15-year FRM also decreased, from 5.95 percent to 5.9 percent with points decreasing to 1.02 from 1.16.
One-year ARMs showed a slight interest rate increase from 7.09 percent to 7.14 percent while points nose-dived to 0.31 from 1.59. This may be an indication that lenders are using lower points as a sales tactic to bring more borrowers back to the wildly unpopular short-term ARM.
Mortgage applications increased 3.6 percent on a seasonally adjusted basis and 3.2 percent unadjusted from the previous week but applications were still running 22.8 percent behind the pace one year ago.
Applications for refinancing existing mortgages increased to 36.8 percent of all applications from 36.4 percent a week earlier while the market share of ARMs remained unchanged at 8.5 percent.