Doses of Falling Rates Fail to Stimulate Refi Recovery

The average 30-year fixed rate mortgage fell 3 basis points (BPS) — or 0.03% — from the prior week to 5.98%, according to Freddie Mac’s Primary Mortgage Market Survey. A year ago, Freddie said the 30-year was at 5.99%.

An economist for the company said the 30-year fell below six percent for the first time in 8 weeks “as investors in bond markets were calmed by assurances from Fed monetary policy makers that no action would be taken until 2004 to raise the Federal Funds Rates.”

The 15-year fixed rate was unchanged from the prior week at 5.30%, Freddie’s survey of 125 lenders said.

The average one-year Treasury-indexed adjustable rate mortgage (ARM) was down 4 BPS to 3.77%, Freddie reported.

Easing rates have done little to stimulate mortgage activity. Total loan applications were off 3.7% from the prior week, according to the Mortgage Bankers Association of America (MBA). In its Weekly Mortgage Applications Survey released Wednesday, the group said its Market Composite Index ended at 699.6.

While refinance activity was level with the prior week, falling purchase applications pushed the share of refinances up to 51.9% from 49.9% the prior week, MBA reported..

Half of the mortgage bankers, mortgage brokers, and other industry experts surveyed by Bankrate.com expect no change in rates over the next 30-45 days, while 30% see rising rates and 20% expect rates to fall.