After six consecutive weeks of run-up, mortgage rates
tail and declined during the week ended August 18 (Freddie Mac) and August 19
(Mortgage Bankers Association.)
While decreases were not large, they were notable, and with the economy appearing
a bit rocky and pundits predicting either a slow shhhhh or perhaps even a large
POP of the much discussed "housing bubble" any
rate relief is welcome.
Freddie Mac, in its "Weekly Primary Mortgage Market Survey" found
the 30 year fixed rate mortgage down 9 basis points to 5.80 percent from the
previous week and the 15-year fixed down 7 points to 5.40 percent. Fees and
points for the 30 were unchanged at 0.5 and down from 0.6 to 0.5 for the 15-year.
The 5/1 ARM declined from 5.40 percent to 5.34 percent but the 1-year ARM was
up albeit negligibly from 4.57 to 4.58 percent. Points for the two ARMS were
unchanged at 0.6 and 0.7 respectively.
This turn-about came after six straight weeks in which the 30 year fixed rose
from 5.53 percent for the week ending June 30 and the 15-year climbed from 5.12
percent during the same period. The 1-year ARM had a longer straight period
of increases and the 5/1 hybrid followed an upward but slightly more erratic
The Mortgage Bankers Association's Weekly Mortgage Applications Survey
echoed Freddie Mac's finding of rate decreases for the 30-year and the
1-year ARM but at a much lower level; each declined by only 1 basis point. The
30-year rate was 5.78 percent with 1.20 points (down .02) and the 1-year, 4.84
percent with points increasing from 1.01 to 1.05. The 15-year fixed, however,
increased 1 basis point to 5.41 percent while points decreased to 1.19 from
Mortgage application activity was down again from the previous
week; 0.7 percent on a seasonally adjusted basis and 1.8 percent unadjusted.
Still activity continued to run in double digits above the same period in 2004,
in this case 17.2 percent higher.
Perhaps reflecting the slight dip in rates, MBA found that refinancing as a
share of all mortgage activity was up to 43.7 percent from 42.4 the previous
week and ARMS represented 28.1 percent of total applications, 8 basis points
less than the week before.