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While mortgage rates have improved for the second week in a row, loan applications showed no sign of recovery.
Leading the decline was the average 15-year fixed rate mortgage, which fell 16 basis points (BPS) from the prior week to 5.30%, according to Freddie Mac. A year ago, the 15-year was at 5.47%, Freddie said in its Primary Mortgage Market Survey this week. The average 30-year came in at 6.01%, Freddie said, 15 BPS lower than the prior week. Freddie’s chief economist, Frank Nothaft, said in the survey that the markets anticipated the Fed would not raise rates. “Add to that the fact that recent economic data shows core inflation is less than the market expects, and we see mortgage rates drop once again,” Nothaft said. In fact, the Fed did keep its federal funds target rate at 1 percent. In an announcement Wednesday the agency said, “the evidence accumulated over the intermeeting period confirms that spending is firming, although the labor market has been weakening. Business pricing power and increases in core consumer prices remain muted.” Falling just 6 BPS, the average 1-year Treasury-indexed adjustable rate mortgage came in at 3.81%. While rates have fallen for the past two weeks, refinance applications are still slowing. In its Weekly Mortgage Applications Survey, the Mortgage Bankers Association of America (MBA) reported that refinance applications fell 15% from the prior week — with the Refinance Index coming in at 2438.5. Overall applications were also down, MBA said, with the Market Composite Index falling almost six percent to 726.7. While refinance and total applications were off, purchase applications jumped nearly 6%, with that index ending at 432.4. Don’t look for much direction from Bankrate.com’s panel of mortgage bankers, mortgage brokers and other industry experts. The consumer financial publication reported that 36% of those surveyed expect rates to fall, 36% expect no changes, and 28% see rates rising. |
Sam Garcia has been in mortgage lending since 1980, and is publisher of MortgageDaily.com. He also owns and operates CloseNow.com, a real estate portal site.
email:Â SamGarcia@MortgageDaily.com