After quite a few weeks floating in the doldrums, mortgage rates made some modest moves last week. Unfortunately those movements, from a consumer perspective, were all in the wrong direction.
According to Freddie Mac�s Primary Mortgage Market Survey� the 30-year fixed-rate mortgage (FRM) averaged 6.21 percent with an average 0.4 point. This is an increase from the previous week when it averaged 6.15 percent with 0.5 points.
The 15-year FRM had an average contract interest rate of 5.92
percent with 0.4 point compared to 5.87 percent with 0.5 point for the week
ended May 10.
Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.92 percent this week, with an average 0.5 point, up from last week when it averaged 5.89 percent with 0.6 point.
The one-year Treasury-indexed ARM was unchanged from the contract average of 5.48 percent with 0.7 point the previous week.
According to Frank Nothaft, vice present and chief economist of Freddie Mac, "Mortgage rates inched up this week following the Federal Open Market Committee statement reiterating that the predominant concern remains the risk that inflation will fail to moderate as expected. However, as long as core inflation continues to trend downward and economic growth remains sub-par it is unlikely that we will see any big movement in mortgage rates.
Recent indicators point to continued weakness in the housing market, with the bottom of the cycle still months away. There are signs that house sales are stabilizing and excess inventories beginning to come under control, but building permits continue to be weak and condo sales are soft in a number of markets. On a bright note, existing home sales in the first quarter were up 2.4 percent over the fourth quarter of 2006, according to the National Association of Realtors. And the average pace of mortgage applications for home purchase over the first two weeks in May was the strongest since January 2006, according to the Mortgage Bankers Association."
And the Mortgage Bankers Association (MBA) released its Weekly Mortgage Applications Survey for the week ending May 18. It also showed more movement than we have come to expect in recent months, also in an upward direction.
The average contract interest rate of 30-year FRMs increased 10 basis points to 6.23 percent with points increasing from 1.47 (including the origination fee) to 1.53.
The 15-year FRM had an average contract interest rate of 5.96 with 1.24 points compared to 5.81 percent with 1.35 points the previous week.
The greatest change was recorded by one-year ARMS which increased from 5.61 to 5.72 percent with points dropping to 1.1 from 1.13.
All rate information is for 80 percent loan to value originations.
Mortgage activity was up slightly from the previous week � 1.6 percent on a seasonally adjusted basis and 1.4 percent unadjusted. Application volume was 23 percent higher than the same week one year ago.
Refinancing as a share of all mortgage activity increased fractionally from the previous week; 42.3 percent compared to 42.1 percent. The ARM share also recovered a bit and accounted for 18.1 percent of all applications. The ARM share the previous week was 17.4 percent.Breaking News! Read The Full Story Here