Most Mortgage Rates Increase During Wild Week in Financial Markets

Mortgage interest rates increased during the week ended March 13, in some cases more than wiping out the substantial declines reported for the week ended March 6.

According to Freddie Mac's Primary Mortgage Market Survey, the 30-year fixed-rate mortgage (FRM) had an average rate of 6.13 percent, an increase of 10 basis points from the previous week during which the average had dropped 21 basis points. Fees and points last week were unchanged at 0.5.

The 15-year FRM which had dropped from 5.72 percent to 5.47 percent the week before was back up to an average of 5.60 percent in the current week. Fees and points were unchanged at 0.5.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.58 percent this week, with 0.6 point, up from last week when it averaged 5.34 percent with 0.5 point. Not only did the 5/1 take back the 9 basis point decline a week earlier but, at 5.58 percent the interest rate was the highest of 2008.

One-year Treasury-indexed ARMs were reported at 5.14 percent this week, up from last week when it was 4.94 percent, and the week before when the average was 5.11 percent. Fees and points increased from 0.5 to 0.7.

"Average mortgage rates were up for all loan products reported," said Frank Nothaft, Freddie Mac vice president and chief economist. "However, for the first 11 weeks so far this year, the average 30-year fixed rate is still below 5.9 percent, and the average 30-year rate in January was the lowest since July 2005.

"The combination of lower house prices and lower mortgage rates contributed to a more affordable market for homebuyers. The National Association of Realtors® reported that January's Pending Home Sales Index held unchanged from December, contrary to the consensus expectation of a 1 percent slide, signaling that existing home sales in February could hold steady from January's level."

The Mortgage Bankers Association reported in its Weekly Mortgage Applications Survey for the week ended March 24 that the average contract interest rate for 30 year FRMs decreased to 5.98 percent from 6.37 percent the previous week with points, including the origination fee, dropping from 1.05 to 0.890.

The 15-year FRM had an average contract interest rate during the week of 5.24 percent compared to 5.72 percent the week before. Points decreased to 0.97 from 1.06.

The rate for the one-year ARM increased to 6.95 percent from 6.72 percent with points increasing from 1.27 to 1.64.

All quotes are for 80 percent loan-to-value mortgages.

Application volume was down from the previous week, a decrease of 2.9 percent on a seasonally adjusted basis and 2.8 percent unadjusted. Activity was also down compared with the same week one year ago by 3.7 percent.

Refinancing applications as a share of all applications decreased to 49.7 percent from 50.6 percent the previous week and the market share of ARMs decreased from 15.5 percent to 7.9 percent which must be the lowest level for the ARM in several years.