In Freddie Mac Primary Mortgage Market
Survey, the short-term mortgage rates that had been rising very sharply during
the time of few weeks suddenly fell slightly last week. Whereas the long-term
rates almost remained unchanged.
The 30-year fixed-rate mortgage (FRM) moved up one basis the point with 0.5 points from 6.45 per cent to 6.46 per cent with the same 0.5 points.
During the year 2006, at this same time the average rate of 30-year fixed
rate mortgage was 6.47 per cent.
The 15-year fixed-rate mortgage with 0.5 points averaged 6.15 per cent. Hardly shifting from 6.12 per cent with 0.5 points during the week
ending on August 30. Previous year during this time the 15-year fixed-rate the mortgage was at 6.16 per cent.
The 5-year Treasury-indexed hybrid adjustable-rate mortgage
(ARM) had an average contract interest rate of 6.32 per cent with 0.6 points, yet
again just a very little change from the previous week when it running at a
rate of 6.35 per cent with 0.6 points. The current rate is 19 basis points higher
compared to what it was at this same time of 2006.
The most dramatic change has been shown by the 1-year
treasury indexed adjustable-rate mortgage. After jumping 24 basis points to
5.84 per cent with 0.8 points during the last week, the adjustable-rate mortgage
settled down and returned back 10 of those basis points, averaging 5.74 per cent with 0.6 points.
Frank Nothaft, vice-president and chief economist of Freddie
Mac said, "Over the past week, long term mortgage rates were largely
unchanged as the most recent economic news showed smaller increases than had
been expected." He explained it with the example of a rise in the core
personal consumption expenditure price index at an annualized rate of only 1.3 per cent in the second quarter whereas July's consumer spending data has
shown a 1.9 per cent gain in the core price index for the 12 months ending in
July.
In the Mortgage Bankers Association's (MBA) Weekly Mortgage
Applications Survey for the week ended September 7 demonstrated a remarkable drop
in the 30-year fixed-rate mortgage, from 6.42 per cent with 1.09 point to 6.25 per cent with 1 point.
The average contract interest rate for the 15-year fixed-rate mortgage also had a strong decrease to 5.9 per cent with 1.03 points from
6.10 per cent with 1.16 points. The short term 1-year ARM decreased to 6.34 per cent from 6.52 per cent with points remaining unchanged at 0.93.
The mortgage application volume increased by 5.5 per cent from
the previous week on a seasonally adjusted basis, but was down 16.7 per cent from that previous week and was up with a slight 0.1 per cent from what it was
in the earlier year during the same time.
As a share of total mortgage activity, refinancing is up by
0.7 per cent. It is now 42.1 per cent from 41.4 per cent during the last week.
However, the market share of adjustable-rate mortgages is dropping down
continuously from 13.2 per cent the previous week to 12.6 per cent this week.
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