The two mortgage rate surveys we follow each week showed few significant changes for the weeks ended May 3 (Freddie Mac) and May 4 (Mortgage Bankers Association) although the MBA data did show a substantial change in the 30-year fixed rate mortgage (FRM) rate.

Freddie Mac's Primary Mortgage Market Survey reported that the 30-year FRM and the 15-year FRM were both unchanged from the previous week at 6.16 percent with 0.5 point and 5.87 percent with 0.5 point respectively. Exactly one year ago the 30-year had an average contract interest rate of 6.59 percent and the 15-year was at 6.22 percent.

The five-year Treasury-indexed hybrid adjustable rate mortgages (ARMs) dropped one basis point to an average of 5.87 percent with points and fees averaging 0.6 compared to 0.7 the previous week. The one-year Treasury-indexed ARM also lost one basis point, averaging 5.42 percent. Fees and points were unchanged at 0.7.

Frank Nothaft, Freddie Mac vice president and chief economist commented, "The recently advanced report of first quarter Gross Domestic Product (GDP) was weaker than expected, growing only 1.3 percent. The housing market alone shaved a full percentage point off real GDP growth. Additionally, both consumer spending and price increases in consumer expenditures were quite tame in March. These contributing factors allowed mortgage rates to hold steady this week."

"Interestingly, the refinance share of mortgage applications has been on a downward trend from a recent peak of nearly 53 percent in December, 2006 to around 42 percent last week. But a majority of refinancing involved homeowners extracting equity from their homes. (See yesterday's report on First Quarter 2007 cash-out refinancing.) Given that rates on home equity loans are currently around 8.25 percent, homeowners have a big incentive to use cash-out refinancing as an alternative source of financing."

MBA's Mortgage Applications survey reported the biggest change; the 30-year fixed-rate mortgage had an average contract interest rate of 6.1 percent compared to 6.14 percent the previous week. Points, including the origination fee, increased to 1.48 from 1.31.

The 15-year FRM decreased a single basis point to 5.82 percent with points unchanged at 1.25 and the one-year ARM decreased from 5.79 percent to 5.71 percent with points unchanged at 0.73.

Mortgage activity increased 3.6 percent on a seasonally adjusted basis from one week earlier and 4 percent unadjusted. Applications were up 19.9 percent from the same week in 2006.

The Government Loan Applications Index, which primarily counts FHA loan activity, reached its highest level last since July 1, 2005.

Refinancing as a percentage of all mortgage activity increased to 41.8 percent from 41.5 percent the previous week and even the ARM share of mortgages increased slightly from 17.9 percent to 18 percent.