Mortgage rates expected to easeby Tim Manni
Rates on the most popular types of mortgages moved in different directions, according to HSH.com’s Weekly Mortgage Rates Radar. The average rate for conforming 30-year fixed-rate mortgages rose by a single basis points (0.01 percent) to 3.71 percent. Conforming 5/1 Hybrid ARM rates decreased by three basis points, closing the Wednesday-to-Tuesday wraparound weekly survey at an average of 2.67 percent.
“A rough Monday for the stock market put some money back into bonds and mortgages,” said Keith Gumbinger, vice president of HSH.com. “Despite the small rise in this week’s survey and another equity rally on Tuesday, mortgage rates should break their upward trend over the past six weeks and ease a bit as the week progresses.”
Uncertainty surrounding an election in Italy fostered a rush into bonds on Monday, driving the influential 10-year Treasury bond down to its lowest daily yield in a month’s time. Even solid news about new home sales and reassurance from Federal Reserve Chairman Bernanke about the Fed’s commitment to its quantitative easing (QE) programs failed to lift yields much.
“Stock investors like that the Fed is doing all it can to promote economic growth,” said Gumbinger. For mortgage borrowers, though “uncertainty, fear and poor economic prospects are the keys to producing lower mortgage rates, such as those we had as we approached the ‘fiscal cliff’ at the end of 2012.”
Rates up, applications down
As expected, mortgage rates and mortgage applications moved in opposite directions (again) last week. According to the Mortgage Bankers Association’s Weekly Mortgage Applications Survey, overall applications dropped 3.8 percent for the week ending Feb. 22, 2013.
Purchase applications fell 5 percent, its lowest point since the end of December, and refinance applications fell 3 percent, its lowest point since July 2012.
The refinance share of activity remained the same at 77 percent of all applications, while the HARP’s share of refinance applications ticked one percent higher to 30 percent. ARMs remained unchanged at 4 percent.