| 30-Year to Stay Below 6% for Q1Rates and apps fall
January 7, 2005 By COCO SALAZAR |
The first week of 2005 saw rates fall, and the 30-year should remain below 6% throughout the quarter, according to one industry economist.
The 30-year fixed-rate mortgage averaged 5.77%, edging down three basis points within the past week, according to Freddie Mac’s latest survey of 125 thrifts, commercial banks and mortgage lenders. In the first week of January last year, this average was 10 BPS higher.
The average for the 15-year nudged down two basis points to 5.21%, the government-sponsored enterprise reported.
Down nine BPS from last week, the 1-year Treasury-indexed ARM reportedly came in at 4.10%. The ARM share of applications slipped below one-third, according to the Mortgage Bankers Association’s latest application survey, which is based on data that runs one week behind Freddie’s.
Five-year Treasury-indexed hybrid adjustable-rate mortgages, making their debut on the survey, averaged 5.03% this week. Freddie will now include 5/1 hybrid data because its annual ARM survey confirmed a large enough market for the product’s direction to be tracked.
“Economic news seems to reflect steady growth and low inflation, placing little upward pressure on interest rates,” said Amy Cutts, Freddie’s deputy chief economist, in an announcement. “Although we expect mortgage rates will start to trend gently upward over the year, 30-year fixed mortgage rates should stay under six percent, at least through the first quarter.”
A majority, or 86%, of Bankrate.com’s panel of 100 industry “experts” believed rates will rise in the next 30 to 45 days; 86% voted for an upturn and the rest predicted a decrease.
During the shortened New Years week, mortgage application volume slumped by nearly 11%, pulling the Market Composite Index down to 605.7, MBA said. At this time last year, application volume was reported at 599.9.
Purchase-money requests fell almost 14%, MBA reported, while refinance application activity dropped 6%.
The refinance share of total mortgage applications, however, reportedly edged up from the previous week to 48%.
