Mortgage Rates Curbed By Housing Recession
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Mortgage rates decreased for the second week in a row according
to the results of Freddie Mac's Primary Mortgage Market Survey for the previous
week.
The 30-year fixed-rate mortgage (FRM) decreased from 6.69 percent with 0.5
point to 6.67 percent with 0.4 point. One year ago the 30-year FRM averaged
6.78 percent.
The 15-year FRM saw a similar decline, from 6.37 percent and 0.5 point to 6.34
percent with 0.4 point.
The interest rate for the five-year Treasury-indexed hybrid adjustable-rate
mortgage (ARM) declined one basis point from the previous week to 6.30 percent
while fees and points also dropped from 0.6 to 0.5. The one-year Treasury indexed
ARM lost one basis point to average 5.65 percent and fees and points declined
from 0.7 to 0.5.
According to Frank Nothaft, Freddie Mac vice president and chief economist,
"Mortgage rates edged down slightly for the second week in a row after having
risen over the previous month and a half, and as financial markets prepared
for the June 28th Federal Open Market Committee's announcement on monetary policy."
"This week we saw further effects of the current housing recession.
May's existing home sales (including condominiums and co-ops) fell 0.3 percent
to the slowest pace since June 2003, and the number of months houses were available
for sale rose to 8.9, the longest since June 1992. In addition, home prices
fell 2.1 percent in twenty metropolitan areas for the year ending April 2007,
according to the S&P/Case Shiller® composite index, the largest year-over-year
drop since the data began in January 2001."
Rates also dropped according to the Mortgage Bankers Association
Weekly Mortgage Applications Survey for the week ending June 29. The results,
delayed because of the Independence Day holiday, reported that the 30-year FRM
had an average contract interest rate of 6.50 percent with 1.69 in points, including
the origination fee. The previous week the 30-year averaged 6.60 percent with
1.54 points.
The average contract interest rate for a 15-year FRM decreased to 6.20 from
6.24 percent with points increasing from 1.41 to 1.43, and the one-year ARM
averaged 5.49 with 1.17 points compared to 5.51 percent with 1.14 points a week
earlier.
Application volume was virtually unchanged, increasing 0.1
percent on a seasonally adjusted basis and decreasing 0.1 percent unadjusted
from the previous week. The volume, however, was 9.7 percent higher when compared
to the same week in 2006.
Refinancing represented 37.8 percent of total applications compared to 38.7
percent the previous week. Adjustable rate mortgages had an increased market
share; 21 percent compared to 20.4 percent a week earlier.
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