Long term interest rates took a bit of a dive during the week ended November 22 according to Freddie Mac's Primary Mortgage Market Survey. The 30-year fixed-rate mortgage (FRM) averaged 6.18 percent, A drop of six basis point from the previous week and the lowest point the 30-year FRM has seen since the week ended January 26 when it averaged 6.12 percent. This was also ten basis points below the rate one year ago.
The 15-year FRM was also down to 5.91 percent compared with 5.94 percent for
the week ended November 15. This same week in 2005 the rate was 5.81 percent.
Fees and points for both FRMs were unchanged at 0.5.
The five-year Treasury-indexed adjustable rate mortgage lost 5 basis points averaging 5.88 percent. This is the lowest the 5/1 has been since the week ending March 16 when it averaged 5.93 percent.
One-year Treasury-indexed ARMs averaged 5.49 percent this week, down from last week when it averaged 5.53 percent. At this time last year, the one-year ARM averaged 5.14 percent. Fees and points for both ARMS moved from 0.5 to 0.6.
"Housing starts in October were down more than expected, which the market saw as an indication housing would be a bigger drag on the economy than had previously been thought," said Frank Nothaft, Freddie Mac vice president and chief economist. "Slower growth usually means less inflation and less inflation means lower interest rates. Hence, the drop in mortgage rates this week."
The Mortgage Bankers Association's Weekly Mortgage Applications Survey for the week ending November 24 also indicated that rates were either down or unchanged. In the later category the 30-year FRM remained at 6.13 percent although points, including the origination fee, increased slightly from 0.95 to 0.97. Like last week, this is the lowest level for the long-term fixed rate mortgage since January.
The 15-year FRM lost two basis points, averaging 5.85 percent for the week. Points dropped from 0.96 to 0.87. The one-year ARM was down one basis point to 5.87. Points increased from 0.8 to 0.81.
Application volume decreased 3.9 percent on a seasonally adjusted basis from the previous week and 34.4 percent when unadjusted. The big downward adjustment was primarily due to the holiday shortened work week. Volume was 1.6 percent less than during the same week in 2005.
Refinancing as a share of overall activity decreased from 48.6 percent to 46.9 percent and the ARM share of all activity was at 24.5 percent, down a full point from the previous week. This is the lowest share of mortgage activity held by ARMs since October 2003.