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| Mortgage hunters are laying low for the moment as rates rose for the third consecutive week and may continue their recent hikes throughout the year depending on the results of a government report due next week, an industry economist says.
The 30-year fixed-rate mortgage averaged 5.91%, jumping 11 basis points from last week and 19 BPS from a year ago, Freddie Mac said in its announcement of the latest Primary Mortgage Market Survey. This “past week’s increase in mortgage rates reflects market anxieties over inflationary pressures, energy price increases, and slipping consumer confidence,” commented Freddie chief economist Frank Nothaft in the announcement. “Taken together these developments suggest less personal spending during the last quarter of the year and additional upward pressure on mortgage rates.” The average for the 15-year also shot up 11 BPS within the past week to 5.48%, Freddie reported. In late afternoon trading today, the gauge for long-term mortgage rates, the 10-year Treasury note, yielded 4.29% with a price of 99. 63, worse than a week ago at 4.18% and 100.53. Up by 13 BPS, the average for 5-year Treasury-indexed hybrid adjustable-rate mortgages came in at 5.44% this week. The highest weekly jump was seen in the 1-year Treasury-indexed ARM — up a whopping 20 BPS to 4.68%, according to Freddie’s announcement. The increase was much smaller in the ARM index as reflected in Federal Reserve reports showing the 1-year T-bill stood at 3.95% on Wednesday, up only three BPS from a week earlier. “Looking ahead, next week’s employment report for September will provide a critical indicator of the economic effects of the recent hurricanes,” Nothaft added. “If that report confirms the market’s expectation for only a slight bump in the unemployment rate and overall job losses of around 200,000 personnel, mortgage rates may not rise much more through the end of the year.” While Freddie’s latest forecast has the 30-year averaging 5.9% next quarter and 6.0% early next year, the Mortgage Bankers Association latest outlook has the figures for the respective periods at 5.8% and 6.1%. None of the 100 mortgage industry bankers, brokers and individuals surveyed by Bankrate.com believe rates will rise in the next 35 to 45 days, three-quarters predicted a downturn and the rest forecasted they’ll remain relatively unchanged. Last week, loan originators completed 7% fewer applications than in the previous week due to refinance requests tumbling 11% and purchase money loan applications falling 4%, the Mortgage Bankers Association reported. Refinances represented 44% of last week’s applications, MBA said, while ARM share slipped to under 29%. |
Coco Salazar is an assistant editor and staff writer for MortgageDaily.com. E-mail: [email protected]
