Mortgage Rates Drift Short Term With Little Change Since Last Year

Interest rates during the week ended November 9 continued to exhibit the same meandering pattern that they have for months according to the Primary Mortgage Market Survey released by Freddie Mac.

The 30-year fixed-rate mortgage (FRM) averaged 6.33 percent for the week with average fees and points of 0.6. Last week rates averaged 6.31 percent. In spite of a high water mark of 6.80 percent in July, the 30-year has been moving within a narrow range - 6.3 to 6.4 since the week ended September 21 and is, in fact, virtually unchanged from one year ago when the average was 6.36 percent.

The 15-year FRM moved from 6.02 percent during the week of November 2 to 6.04
in the most recent survey Fees and points were at 0.6. One year ago the 15-year averaged 5.89 percent. The high, thus far this year was 6.44 percent the week ended July 6.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.08 percent this week, with an average 0.7 point, up from last week when the average was 6.05 percent. A year ago, the five-year ARM averaged 5.81 percent. One-year Treasury-indexed ARMs were at 5.55 percent this week with an average 0.8 point, up from last week's rate of 5.53 percent. At this time last year, the one-year ARM averaged 5.12 percent.

In the Freddie Mac Survey fees and points for each of the four mortgage products increased 0.2 from the previous week.

Frank Nothaft, Freddie Mac's vice president and chief economist said that there had actually been a greater upward movement in rates early in the week but this "began to drift lower as the market looked more deeply into the (unemployment) numbers." He said that the loss of jobs in the construction industry was one factor that held rates down.

The Mortgage Bankers Association's Weekly Applications Survey for the week ended November 10 indicated that rates among its survey respondents moved slightly lower from that reported the previous week.

The average contract interest rate for a 30-year fixed-rate mortgage was down 9 basis points to 6.15 percent with points decreasing to 0.98 from 1.08 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. This is the lowest rate recorded by MBA for the 30-year FRM since January 2006.

15-year fixed-rate mortgages decreased to 5.85 percent from 5.96 percent. Points were up 0.03 to an even 1.0.

One-year ARMs decreased to 5.87 percent from 5.89, while points decreased to 0.78 from 0.8.

In spite of the holiday shortened week application volume increase 4.3 percent on a seasonally adjusted basis and 7.6 percent unadjusted. Volume was down a scant 0.1 percent when compared with the same week in 2005.

Refinancing accounted for 48 percent of all mortgage applications. This is the highest level for refinancing since February 2005. Refinancing represented 46.3 percent of all applications during the week ending November 3. However, the popularity of adjustable rate mortgages continued to fall. ARMs made up 25.5 percent of the market compared to 26.4 percent a week earlier.