Mortgage Rates Increase Despite Job Figures
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Only fixed-rate mortgages (FRMs) continued to trend downward last week according
to the results of Freddie Mac's Primary Mortgage Market Survey.
Shorter term rates were all up slightly in that survey as were all rates in the
Weekly Mortgage Applications Survey released by the Mortgage Bankers Association
(MBA) for the week ended August 10.
The Freddie Mac survey found that the 30-year FRM had an average contract interest
rate of 6.59 with 0.4 point for the week, a drop of 9 basis points from the
week ended August 2. Fees and points that week averaged 0.3.
The 15-year FRM averaged 6.25 percent with 0.4 point compared with 6.32 percent
with 0.3 point one week earlier.
The average rate for five-year Treasury-indexed hybrid adjustable-rate mortgages
(ARMs) was 6.33 percent up 4 basis points from one week earlier. Fees and points
averaged 0.5 both weeks.
One-year Treasury-indexed ARMs were also up from the previous week, 5.65 percent
with 0.5 point compared to 5.59 percent also with 0.5 point.
"Interest rates on prime conforming fixed-rate mortgages eased further
in the past week, according to the Primary Mortgage Market Survey, even though
other sources such as HSH Associates reported that jumbo fixed rates increased
by a quarter percent or more last week," said Frank Nothaft,
Freddie Mac vice president and chief economist. "Job creation fell short
of market expectations, with 92,000 jobs added in July, the smallest gain since
February, and June's number was revised down by 6,000. In addition, the unemployment
rate ticked up for the first time in four months to 4.6 percent.
"Freddie Mac reported that the amount of home equity cashed out through
refinancing totaled $76.7 billion in the second quarter," Nothaft said.
"Although slightly higher than the previous quarter's level, it still
reflected a drop of $24.5 billion compared to the same quarter last year. Both
the tightening of underwriting standards and slackening house price appreciation
are possible contributing factors to the decline."
The MBA survey pegged the 30-year FRM at 6.45 percent with 1.54 points, including
the origination fee. The previous week the rate was 6.41 percent with 1.62 points.
The average contract interest rate for the 15-year FRM increased from 6.16
percent to 6.19 percent with points decreasing from 1.18 to 1.16. The one-year
ARM was up from 5.69 percent with 1.09 points to 5.81 percent with 1.11 points.
All rates quoted are for 80 percent loan to value conforming loans.
The volume of mortgage applications was up 3.4 percent from the previous week
on a seasonally adjusted basis and 2.7 percent unadjusted and was 20.6 percent
higher than one year ago.
Doug Duncan, MBA's chief economist and senior vice president
said, "Recent upheavals in the mortgage industry may be temporarily increasing
the level of retail application activity at the large lenders that participate
in the MBA survey rather than representing a system-wide increase"
Refinancing as a share of all market activity remained at 39.9 percent and
the market share of adjustable rate mortgages decreased to 21.0 percent from
22.5 percent the previous week.
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