Tag Archive | "adjustable rate mortgage"

U.S. Mortgage Applications Slightly Dropped in Early June

Applications for home loans decreased last week, but the demand for refinancing increased as interest rates bordered down, a financial group said on Wednesday.

The seasonally adjusted Purchase Index for mortgage application activity, including the demand for home purchase and refinancing, dropped 0.4% in the week that ended June 3, according to the Weekly Mortgage Applications Survey carried by the Mortgage Bankers Association. The results shown include the adjustment made for the Memorial Day holiday. The Purchase Index dropped 11% from last week on an unadjusted basis.

Meanwhile, the unadjusted Purchase Index dropped 15.2% farther from the previous week. It showed that the unadjusted Purchase Index was up 9.0% than the same week a year ago.

The refinancing applications, which were adjusted seasonally, increased 1.3%, but the measure of loan requests for home purchases decreased 4.4%. The MBA said the refinance share of loan activity rose to 67.3% of the entire applications from 65.7% a week earlier. According to the industry group, that is the highest share since January 28 this year. The adjustable-rate mortgage share activity declined to 6.1% from 6.2% of the entire applications from last week.

The average 30-year contract interest rate for fixed-rate mortgages dropped 4.54% from 4.58% percent. Since November 2010, the current figure shown is the lowest 30-year contract rate. From the previous week, the effective rate declined as well.

For fixed-rate mortgages, the average 15-year contract interest rate dropped 3.67% from 3.78%. Since October 2010, the recent 15-year contract rate is also the lowest rate recorded.


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30 Year Mortgages Rates Drop to 5%

Mortgage Rates DropThe announcement that the average rate on a 30-year fixed-rate mortgage (FRM) fell from the recent high last week of 5.05 percent to 5 percent this week was welcome news for potential home buyers who have been on the sidelines recently.

Last week’s average rate on a 30-year FRM was the highest since April 2010 (Primary Mortgage Market Survey released Thursday by Freddie Mac), and dipped this week based mainly on the weakening of the 10-year Treasury yield which it tends to follow.

The vice president and chief economist at Freddie Mac, Frank Nothaft, indicated that, until 2009, the rate of a 30-year FRM had not been as low as 5 percent once in the years since 1971 when Freddie Mac started their survey.

Weakening also, the rate on a 15-year FRM dropped on average .02 percent to 4.27 percent from last week’s 4.29 percent. Also, the rate on the five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) dropped on average .05 percent to 3.87 percent from last week’s 3.92 percent. Interestingly, the rate on the one-year Treasury ARM increased on average .04 percent to 3.39 percent from last week’s 3.35 percent.

The White House published its intended $3.7 trillion budget this week. Although there were fears of higher inflation last week which saw a rise in these rates, the budget request appeared to be instrumental in bringing them down again this week.

The average rate on a 30-year FRM bottomed out at 4.17 percent in November; the lowest in 40 years. The average rate on a 15-year FRM dipped to a low of 3.57 percent that month; the lowest since 1991.

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