Mortgage Rates Continue To Exhibit Split Personality

According to Freddie Mac, mortgage rates were up almost across the board for the week ending December 8. Fixed rates took the biggest hit with the 30-year fixed rate rising six basis points to 6.32 percent and fees and points increasing from 0.5 to 0.6. The 15-year increased by the same amount in each category with a reported average rate of 5.87 percent and 0.6 for fees and points. Adjustable rates showed more modest changes, the 1-year ARM in fact was unchanged at 5.16 percent and 0.8 fees while the 5/1 ARM crept up two basis points to 5.78 percent with an increase in fees from 0.6 to 0.7.

The Mortgage Bankers Association's Weekly Mortgage Applications Survey for the week ending December 9, however, indicated that fixed rates for mortgages issued by its pool of respondents had dropped. The 30-year fixed rate mortgage averaged 6.28 percent, down from 6.32 percent the previous week, with points, including the origination fee, decreasing to 1.25 from 1.30 for 80 percent loan to value originations.

The 15-year fixed mortgage barely budged, but it was down a scant one basis point to 5.83 percent. The big downturn with this product was in fees and points which were down 0.11 from the previous week to 1.28.

The one-year ARM increased one basis point to 5.50 percent and points increased to 0.94 from 0.91.

Perhaps more important was yet another downturn in the Market Composite Index, a measure of mortgage loan application volume. The index decreased 5.7 percent on a seasonally adjusted basis from the week before and 8.1 percent when not adjusted. Compared to the same week in 2004, applications were down 11 percent.

Refinances as a share of overall mortgage activity fell to 40.2 percent from 41 percent the previous week. Adjustable rate mortgages represented 33.5 percent of total loan applications, up from 33.1 percent during the week ending December 2.