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Mortgage requests rose as rates relented from a 4-week rise.
The 30-year fixed-rate mortgage averaged 6.74%, 5 basis points below a week ago but 1.08% higher than a year ago, according to Freddie Mac’s announcement of its latest survey of 125 mortgage-lending companies, thrifts and commercial banks. Falling 7 BPS from last week, the average 15-year came in at 6.37%, Freddie reported. The average 5-year Treasury-indexed hybrid adjustable-rate mortgage was reported at 6.33%, 6 BPS lower than a week earlier. The largest decline this week — by 8 BPS to 5.75% — was seen in the average 1-year Treasury-indexed ARM, Freddie reported. This ARM’s index, the 1-year T-bill itself, was at 5.26% as of Wednesday, down 3 BPS from a week earlier. “June’s employment report caught financial markets off guard,” Freddie Chief Economist Frank Nothaft commented. “In response, long-term bond yields eased a bit this week. Combined with the financial market’s expectation of only one more rate hike by the Federal Reserve this year, upward pressure on long-term rates eases considerably. This should keep mortgage rates relatively stable for the foreseeable future.“ Freddie’s updated forecast has the 30-year averaging its current level throughout the quarter, rising to 6.8% next quarter and going past that level, to 6.9%, until the second quarter 2007. The mortgage “experts” surveyed by Bankrate.com this week seemed to be on the same train of thought: 42 of the 100 panelists believe rates will remain relatively unchanged over the next 35 to 45 days, and the rest were evenly split on whether they’d rise or fall. A 3% increase in purchase money loan demand and a 2% upturn in refinance requests pushed the volume of total mortgage application activity up by 1% from the prior week, the Mortgage Bankers Association reported Wednesday. Of total applications, the share of refinances slipped from the previous week to account for 34% and the ARM share edged down to 29%, MBA said. |
Coco Salazar is an assistant editor and staff writer for MortgageDaily.com. e-mail: [email protected]