Mortgage rates fall back and applications decline as credit increases
After drifting higher for nearly a month, mortgage rates retreated this week but remain within a tight band.
As the markets calmed, home loan rates stabilized. With several key economic reports coming up, volatility could return. An unexpected global event would also cause a jolt to rates. But it seems more likely that they will continue to hover about where they are.
Bankrate.com, which puts out a weekly mortgage rate trend index, found that more than half of the experts it surveyed believe rates will remain unchanged in the coming week.
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According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average sank to 3.43 percent with an average 0.5 point. (Points are fees paid to a lender equal to 1 percent of the loan amount.) It was 3.48 percent a week ago and 3.91 percent a year ago. The 30-year fixed rate hasn’t been above 3.5 percent since late June.
The 15-year fixed-rate average dropped to 2.74 percent with an average 0.5 point. It was 2.78 percent a week ago and 3.13 percent a year ago.
The five-year adjustable-rate average tumbled to 2.73 percent with an average 0.5 point. It was 2.78 percent a week ago and 2.94 percent a year ago.
“Treasury yields fell last week following both the FOMC’s meeting and a disappointing advance estimate for second quarter GDP. Mortgage rates, which had moved up 7 basis points over the past three weeks, responded by erasing most of those gains,” Sean Becketti, Freddie Mac chief economist, said in a statement.
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Meanwhile, mortgage applications decreased again this week, according to the latest data from the Mortgage Bankers Association (MBA).
The market composite index — a measure of total loan application volume — fell 3.5 percent from the previous week. The refinance index dropped 4 percent, while the purchase index declined 2 percent.
The refinance share of mortgage activity accounted for 60.7 percent of all applications.