And this week, they are down.
Mortgage rates, that is. The one week up, two weeks down,
two weeks up pattern continues as the markets try to outguess where the Federal
Reserve is going with rates, fewer people apply for mortgages, and housing sales
in some parts of the country also slide.
Freddie Mac's Weekly Mortgage Market Survey showed an encouraging little
dip for the week ended July 27 as did the Mortgage Bankers Associations Weekley
Mortgage Applications Survey for the week ended July 28.
Freddie's survey showed a drop of 8 basis points in the average rate
for 30-year fixed rate mortgages to 6.72 percent as well as a decrease in fees
and points to 0.3 from 0.5. This is the lowest level for fees and points during
all of 2006.
The 15-year fixed rate mortgage averaged 6.34 percent compared to 6.41 percent
the previous week and fees and points were unchanged at 0.4. The 5/1-year adjustable
rate morning was down only one basis point to 6.35 percent but fees and points
dropped form 0.6 to 0.4. The 1-year ARM eased from 5.80 percent to 5.78 percent
with fees and points unchanged at 0.7.
Frank Nothaft, Freddie Mac's vice president and chief economist stated
"Mortgage rates drifted lower this week on indications that economic growth
is moderating .... Remains under under control and the Fed just may pause
raising rates for a while. Meanwhile, recently released new homes sales ...
lower than expected rate. That drop can be traced directly to higher mortgage
rates, which ..... helping to slow the growth of house prices in 2006."
Rates in actuality have not made much upward progress this year. The first
week in January the following were average rates:
30-year fixed: 6.21 & 0.5
15-year fixed: 5.76 & 0.5
5/1-year ARM: 5.78 & 0.7
1-year ARM 5.16 & 0.7
Thus the different over seven months of rollercoaster changes ranges from 51
to 62 basis points.- not exactly a sea change.
The MBA survey reports similar results for the week. The 30-year fixed-rate
mortage was down 7 basis points to 6.62 percent with points (including the origination
fee) dropping from 1.07 to 1.00.
The 15-year fixed-rate mortgage was down a minimal 3 basis points to 6.28 percent
with points also down 7 basis points to 1.00 and the one-year ARM was the big
winner decreasing from 6.25 percent to 6.18 percent with points down from 0.83
All rates are for conventional 80 percent loan to value mortgages.
Mortgage applications as measured by the Market Composit Index
were down 1.2 percent on a seasonally adjusted basis, the lowest that index
has been since May, 2002. On an unadjusted basis it for 1.4 percent lower than
a week earlier. The index was down 29.0 percent compared to the same week in
Refinancing as a share of overall mortgage applications was up slightly, from
35.6 percent to 37 percent from the previous week while ARM mortgages were down
from 28.6 percent to 27.8 percent. This is the lowest share of mortgage activity
that ARMs have garnered since March 2004.