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.
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.
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.