It was nice while it lasted - one full week to be exact - but, according
to Freddie Mac the mortgage market last week took back most of the rate decreases
that were so welcome the week before. The Mortgage Bankers Association, however,
recorded rate drops stretching into a second week.
Freddie's Weekly Primary Mortgage Market Survey of average contract interest
rates indicated that the 30-year fixed-rate mortgages increased
from 6.74 percent during the week of July 13 to 6.80 percent for the week of
July 20. This was one basis point higher than the rate the week of July 6. Fees
and points were down 0.1 to 0.5.
The 15-year fixed rate mortgage was up four basis points to 6.41 percent with
fees and points unchanged at 0.4. This was still an improvement over the July
6 rates of 6.44 and 0.5 points.
The 5/1-year hybrid adjustable rate mortgage increased only slightly from 6.33
percent with 0.5 points to 6.36 percent with 0.6 points, again less than the
6.39 with 0.6 points reported two weeks ago.
The traditional 1-year adjustable rate mortgage moved up 5 basis points to
5.80 and fees and points increased from 0.6 to 0.7. Again the July 6 rates were
higher at 5.83 percent with 0.8 points.
Freddie Mac's chief economist Frank Nothaft indicated that rate increases reflected
a market that was still spooked by the specter of increasing inflation. "However,
Fed Chief Bernanke, in his semi-annual speech to Congress, hinted that another
hike in overnight lending rates might not be imminent and financial
markets breathed a collective sign of relief which should be reflected in the
results of next week's survey."
The MBA's Weekly Mortgage Applications Survey for the week ended July
21 revealed different results. The average contract rate for 30-year fixed-rate
mortgages dropped four basis points to 6.69 percent and points decreased from
1.13 to 1.07, including the origination fee. 15-year fixed-rate mortgages decreased
from 6.38 percent to 6.31 percent and points were also down to 1.02 from 1.07.
The one-year ARM was also lower by 3 basis points to 6.25 percent with points
decreasing to 0.83 from 0.85. This puts substantial daylight between the Freddie
Mac and the MBA figures for the same product.
All reports are for 80 percent loan to value originations.
Mortgage activity continues to trend down. The application volume decreased
1.3 percent on a seasonally adjusted based and a fraction less when unadjusted.
Compared to the same week in 2005, however, the pace was off 28.2 percent.
Refinancing as a share of all mortgage activity was up to
35.6 percent compared to 35.0 the previous week and adjustable rate mortgages
represented 28.6 percent of total applications compared to 29.0 percent the