Demand for purchase loans near 15-year low
By Inman News
Inman News™
Mortgage rates remained at or near historic lows this week on continued weak economic and housing data, Freddie Mac said in releasing the results of its Primary Mortgage Market Survey.
A separate survey by the Mortgage Bankers Association showed low rates aren’t getting buyers off the fence, with demand for purchase loans remaining near 15-year lows last week.
Freddie Mac’s survey showed rates on 30-year fixed-rate mortgages averaged 4.22 percent with an average 0.7 point for the week ending Sept. 1, unchanged from last week but well below the 2011 high of 5.05 percent seen in February. The average for a 30-year fixed-rate mortgage hit an all-time low, in records dating to 1971, of 4.15 percent during the week ending Aug. 18.
Rates on 15-year fixed-rate mortgages averaged 3.39 percent with an average 0.6 point, down from 3.44 percent last week and a 2011 high of 4.29 percent seen in February. Rates on 15-year fixed-rate mortgages hit a low in records dating to 1991 of 3.36 percent during the week ending Aug. 18.
Rates for 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) loans averaged 2.96 percent with an average 0.6 point, down from 3.07 percent last week and a 2011 high of 3.92 percent in February. That’s a new low in Freddie Mac records dating to 2005.
For 1-year Treasury-indexed ARMs, Freddie Mac said rates averaged 2.89 percent with an average 0.6 point, down from 2.93 percent last week and a 2011 high of 3.4 percent in February. That’s just a hair above the record low of 2.86 percent for 1-year Treasury-indexed ARMs set during the week of Aug. 18.
“Weaker economic data reports eased upward pressure on mortgage rates this week and kept them at or near all-time record lows,” said Freddie Mac Chief Economist Frank Nothaft in a statement.
“The economy grew at a slower rate of 1 percent in the second quarter than was originally reported due to a smaller increase in inventories and fewer exports. In addition, consumer confidence in August fell to the lowest reading since April 2009, according to The Conference Board.”
Looking back a week, the MBA’s Weekly Mortgage Applications Survey for the week ending Aug. 26 showed demand for purchase loans was up a seasonally adjusted 0.9 percent from the week before, but was down 8.2 percent from the same time a year ago.
Requests to refinance were down 10 percent from the week before, but still accounted for 77.8 percent of all applications. The percentage of borrowers seeking ARM loans jumped to 7.1 percent, up from 6.2 percent the week before.
In an Aug. 19 forecast, MBA economists said they expect rates on 30-year fixed-rate mortgages to rise to an average of 4.6 percent during the final three months of this year, and continue a gradual rise next year to an average of 5.2 percent during the fourth quarter of 2012.
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