Rates Pause in Roller-Coaster Ride

Mortgage interest rates declined for the second week in a row according to the Primary Mortgage Market Survey released Thursday morning by Freddie Mac.  This was a change in the recent up-one-week, down-the-next behavior exhibited by rates since early October.  During that period rates reversed direction every week, fluctuating as much as 52 basis points from week to week.

Interest rates for the 30-year fixed-rate mortgage (FRM) averaged 6.14 percent with 0.7 point for the week ended November 13.  During the week ended November 6 the average rate was 6.20 percent also with 0.7 point.

The 15-year FRM dropped from 5.88 percent to 5.81 percent.  Fees and points were unchanged at 0.7 point.

The five-year Treasury-indexed hybrid adjustable-rate mortgage (arm) carried an average interest rate of 5.98 percent with 0.6 point down from the rate of 6.19 percent with 0.6 point a week earlier.

The one-year Treasury-indexed ARM did increase during the week, averaging 5.33 percent with 0.5 point.  During the previous week the average was 5.15 percent with 0.4 point.

Frank Nothaft, Freddie Mac vice president and chief economist, in statement accompanying the survey release said, "Long-term mortgage rates fell slightly this week as signs the overall economy is weakening brought interest rates down market-wide.  In addition, the actions of the Fed in recent weeks to assist commercial paper markets appear to be thawing part of the credit freeze that has gripped capital markets in the U.S., giving banks some breathing room.  This is the second week that rates have come down for fixed-rate mortgages.

"Mortgage applications for home purchase loans fell during the final week in October to the slowest pace since the week of December 29, 2000, based on figures published by the Mortgage Bankers association.  Meanwhile, the National Association of Realtors® (NAR) reported that pending existing home sales fell 4.6 percent in September, below the market consensus; however, the index was 1.6 percent above that of the same period last year."