| Rates Soar While Apps Plummet
Freddie says rates highest this year August 1, 2003 By ANNE LINEBERRY |
| Mortgage rates continued their climb this week, with the 30-year fixed rate jumping 20 basis points, according to Freddie Mac.
Thirty-year fixed rates averaged 6.14 percent, according to the secondary lender’s Primary Mortgage Market Survey. The 15-year fixed rate averaged 5.44 percent, a 17 basis point jump. This week marks the seventh straight week of rising rates for the 15-year, six straight weeks of upward climb for the 30, according to data compiled by Freddie. Both rates carried half a discount point. Freddie’s survey pointed out that according to their compilations, fixed rates are at their highest levels so far this calendar year. Rates are narrowing the gap year over year, with the 30-year average reported at 6.43 percent this time last year and the 15-year averaging 5.84 percent a year ago. Dovetailing the climbing rates, applications plummeted, according to the Mortgage Banker’s Association of America (MBA). The Market Composite Index of mortgage loan applications fell to 972.4 for the week ending July 25. This number represents a drop-off of almost 25 percent from the prior week’s 1284.3, on a seasonally-adjusted basis. The number is even slightly lower, 2.4 percent, than last year’s comparable week, MBA reported in its Weekly Mortgage Applications Survey. All reported indices were lower than the prior week, on a seasonally adjusted basis, MBA said. The refinance index in particular took a hit, dropping from 6181.2 to 4145.8, a 33 percent drop, according to the statement. The conventional index also crashed, falling from 1844.1 to 1376.0, a 25 percent drop, MBA said. The industry group also reported that the share of refinances dropped to 60.4 percent of total applications, down from 68.7 percent the prior week. According to Freddie, the one-year Treasury-indexed adjustable-rate mortgage (ARM) averaged 3.68 with a half a point discount. MBA said that the share of ARMs increased by four percent for the week ended July 25, finishing at 20.6 percent of all mortgages. The 10-year Treasury bond yield continued skyward, closing Thursday at 4.40%, up from its 4.16% close last week. Bankrate.com’s industry experts believe rates will continue upward. Fifty-eight percent predicted next week’s rates will be higher. A fourth believe rates will fall back off, and 17 percent expect them to remain unchanged. |
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Anne Lineberry is MortgageDaily.com‘s editor. She previously worked as an online editor/producer for DallasNews.com and on the Metropolitan desk for the print edition of The Dallas Morning News. Email Anne at AnneLineberry@MortgageDaily.com |
