Rates, Apps Up

The 30-year fixed-rate mortgage average came in at 6.30%, up 2 basis points from last week and from a year ago, Freddie Mac said in its latest survey of 125 mortgage-lending companies, thrifts and commercial banks.

“Mortgage interest rates exhibited little change in the past week … as there was little new information that would cause any great change,” said Frank Nothaft, Freddie chief economist, in an announcement. “For example, January’s retail sales were virtually unchanged from December’s level. Further, Fed Chairman Bernanke testified before the Senate committee and forecasted that the economy seemed likely to expand at a moderate pace this year and next with gradual easing in core inflation.

“In the course of the coming week, January’s housing starts, producer price index and consumer price index are all scheduled for release. These will be the first indicators of the housing market and inflation in early 2007, and we could see interest rates move in response.“

The Mortgage Bankers Association expects the 30-year to average 6.4% throughout the first half of the year and 6.5% throughout the second half and also the first six months of 2008, according to the group’s February mortgage finance forecast. Freddie’s latest outlook has the 30-year averaging 10 BPS lower than MBA’s predictions for this year’s two halves.

The 15-year averaged 6.03%, just 1 BPS above last week’s level, according to Freddie’s survey.

The 10-year Treasury note yielded 4.70% at closing, 5 BPS higher than last Thursday.

Half of the mortgage bankers, mortgage brokers and other “experts” surveyed by Bankrate.com this week expect mortgage rates to remain at their current levels, while the rest were evenly split over whether rates would rise or fall more than 2 BPS over the next 30 to 45 days.

Up 2 BPS from a week ago to 6.01% was the 5-year Treasury-indexed hybrid adjustable-rate mortgage average, Freddie said.

The 1-year Treasury-indexed ARM reportedly averaged 5.52%, or 3 BPS higher than a week earlier. On Wednesday, the 1-year Treasury bill yield was 5.06%, unchanged from the level a week earlier, Federal Reserve data showed.

Mortgage application volume increased about 2 percent during the week ending Feb. 9, when rates reportedly edged down for the first time in two months, according to MBA’s Weekly Mortgage Application Survey. The overall upturn was due to a 5 percent increase in refinance requests, as purchase money loan demand edged down 1 percent from the previous week.

The refinance share of mortgage applications was unchanged from the prior week at 46%, but the ARM share slipped to 21%, MBA added.