Mortgage rates up; HARP numbers way upby Tim Manni
The average rate for conforming 30-year fixed-rate mortgages rose by a single basis point (0.01 percent) to 3.69 percent, according to the Weekly Mortgage Rates Radar. Conforming 5/1 Hybrid ARM rates also increased by a lone basis point, closing the Wednesday-to-Tuesday wraparound weekly survey at an average of 2.77 percent.
“With the July employment report coming in a little better than expected last Friday, investors have been cheered somewhat,” said Keith Gumbinger, vice president of HSH.com. “As a result, some money has been pulled from the safety of bonds, pushing bond yields and mortgage rates a little higher over the last few days.”
The employment report showed that 163,000 new jobs were created in July, more than 50 percent more than was forecast. Despite the better-than-expected figure, the number is still fairly weak, so there’s no reason to expect mortgage rates to continue to march higher.
“Central banks around the world have pledged to do more if conditions worsen,” said Gumbinger, “and this doesn’t suggest that the kind of robust economy needed to push interest rates higher is expected anytime soon. It’s more likely that mortgage rates will continue to bounce along recent bottoms until a new economic trend occurs, whether upward or downward.”
HARP refinances up in June
Mortgage rates set record lows throughout the month on June. According to a recent federal report, borrowers took notice.
Both record-low mortgage rates and an expansion of the HARP program to include all underwater borrowers led to the most Fannie Mae and Freddie Mac HARP refinances since the program began.
According to the Federal Housing Finance Agency’s June refinance report, one in three Fannie Mae and Freddie Mac refinances were made through HARP.
HARP 2.0 is working
The June report indicates that the recent enhancements to HARP—known as HARP 2.0—are reaching their target audience.
“In June, borrowers with LTV greater than 105 percent accounted for 62 percent of HARP volume, up from 32 percent in May. HARP refinances for loans with LTV greater than 125 percent surged in June as lenders began to sell Fannie Mae and Freddie Mac securities containing these loans June 1.”