After pitching upward the previous week long term interest rates were flat during the week ended February 7 according to the results of Freddie Mac's Primary Mortgage Market Survey.

The survey found that the 30-year fixed-rate mortgage (FRM) averaged 5.67 percent with 0.4 point for the week, down a single basis point from one week earlier. The 15-year FRM averaged 5.15 percent with 0.4 point, down from the previous week when it was 5.17 percent and 0.4 point.

The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) did move a bit more dramatically, dropping to an average of 5.21 percent from 5.32 percent the previous week. Fees and points were unchanged at 0.4.

The one-year Treasury-indexed ARM decreased from 5.05 percent to 5.03 percent with fees and points declining from 0.7 to 0.5.

"Long-term mortgage rates were little changed this week, largely in sync with the movements in the Treasury bond yields during the same time," said Frank Nothaft, Freddie Mac vice president and chief economist. "Additionally, economic news released in the past week showed that the economy continues to be weak.

"Non-farm payroll employment fell by 17,000 jobs in December, the first month of job loss since August 2003 while the Institute for Supply Management's non-manufacturing business activity index showed a contraction in this sector last month, the first since March 2003 and the lowest index level since October 2001. The Federal Reserve's Senior Loan Officer Opinion Survey for January reported further tightening of lending standards in residential mortgages over the prior three months, with 53 percent of respondents indicating a tightening of credit in the prime mortgage market, up from 41 percent in the October survey. And 70 percent of those surveyed expect deterioration in credit quality for prime residential mortgages in the coming year."

The Mortgage Bankers Association's Weekly Mortgage Applications Survey for the week ended February 8 indicated that interest rates had made a sharper adjustment. The average contract interest rate for a 30-year FRM increased from 5.61 percent to 5.72 percent with points, including the origination fee, increasing to 1.15 from 0.98.

15-year FRMs carried an average rate that increased from 5.09 percent with 0.92 points to 5.18 percent with 1.08 points.

The average rate for one-year ARMS increased 10 basis points to 5.72 percent with points decreasing to 0.90 from 0.97.

Mortgage originations were down a bit from the previous week although they were still running much higher than 2007 levels. The Market Composite Index which measures loan application volume was down 2.1 percent on a seasonally adjusted basis from the previous week and 0.4 unadjusted. Volume, however, was up 65 percent from the same week in 2007.

Refinancing as a share of all mortgage application activity decreased to 67.4 percent from 69.2 percent a week earlier while the market share of ARMs was up to 9.9 percent from 8.8 percent of all applications the week before.