Mortgage Market Improves

Down for the second consecutive week, the 30-year fixed-rate mortgage averaged 6.18%, off 4 basis points from a week earlier, Freddie Mac said its latest survey of 125 mortgage-lending companies, thrifts and commercial banks showed. At this time a year ago, the average was 6.24%.

“Mortgage rates drifted lower last week largely on the basis of new economic information suggesting a slower economy and lower inflation,” said Frank Nothaft, Freddie chief economist, in the survey announcement.

More than half of the 100 mortgage industry individuals, bankers and brokers surveyed by Bankrate.com this week forecast that rates will go keep going downward over the next month and a half or so. Nearly one-third of the panel predicted rates will remain relatively unchanged and a minority foresaw an increase.

Next quarter, Freddie sees the 30-year averaging 6.3%, the Mortgage Bankers Association has it at 6.4% and Fannie Mae at 6.35%, according to the groups’ latest forecasts.

Freddie said the 15-year averaged 5.92%, down 5 BPS from last week.

Even though the 5-year Treasury-indexed hybrid adjustable-rate mortgage average fell 3 BPS from last week to 5.93%, it still was slightly higher than the 15-year, according to the survey announcement.

The 1-year Treasury-indexed ARM average was the only mortgage rate that did not fall as it was unchanged from a week ago at 5.49%, Freddie said. The 1-year Treasury bill itself, however, sunk 11 BPS within a week’s period to 4.93% on Tuesday, according to Federal Reserve data.

Mortgage originators completed 3 percent more applications in the week ending Feb. 23, MBA reported on Wednesday, noting these results included an adjustment for the Presidents Day holiday. Excluding the adjustment, application volume decreased about 5 percent.

The upturn reflected a 1 percent improvement from the previous week in refinance requests and an increase of 5% on purchase money loan application activity, MBA said.

The refinance share of overall mortgage activity, however, reportedly slipped from the prior week to 43% and the ARM share was unchanged at 21%.