Applications slip as mortgage rates riseby Tim Manni
Rates on fixed-rate mortgages inched higher, while the average rate on the most popular ARM eased slightly, according to HSH.com’s Weekly Mortgage Rates Radar. The average rate for conforming 30-year fixed-rate mortgages rose by a two basis points (0.02 percent) to 3.70 percent, its highest rate since September 2012. Conforming 5/1 Hybrid ARM rates decreased by a single basis point, closing the Wednesday-to-Tuesday wraparound weekly survey at an average of 2.70 percent.
“Mortgage rates aren’t going anywhere very fast,” said Keith Gumbinger, vice president of HSH.com. “A robust stock market continues to draw investor interest at the expense of bonds, so interest rates continue to be firm. Absent some poor economic news, or an end to the recent stock rally, mortgage rates are likely to hold near these levels.”
Although the rise in mortgage rates from their bottoms seems considerable, it doesn’t amount to much for most borrowers, notes Gumbinger.
“For a $100,000 loan, the difference between December’s low and our present ‘high’ amounts to about $13 per month, hardly enough to cancel a refinance or put off a home purchase” he adds. “Borrowers shouldn’t shy away from these opportunities to get a great loan, or hold off hoping for much lower rates.”
Application volume declines
Mortgage applications were down last week, reported the Mortgage Bankers Association. Overall, application volume was down 6.4 percent for the week ending Feb. 15, with refinance and purchase applications falling 2 percent and 2 percent respectively.
Refinances continued to account for 77 percent of all applications, the lowest level since May 2012 and down 1 percent from the prior week.