Fixed-mortgage rates: A stone’s throw from record lowsby Tim Manni
Rates on the most popular mortgages types drifted downward again, according to HSH.com’s Weekly Mortgage Rates Radar. The average rate for conforming 30-year fixed-rate mortgages fell by two basis points (0.02 percent) to 3.54 percent. Conforming 5/1 Hybrid ARM rates decreased by a single basis point, closing the Wednesday-to-Tuesday wraparound weekly survey at average of 2.59 percent.
“Fixed mortgage rates are a stone’s throw from record lows, while five-one hybrid ARMs are already there,” said Keith Gumbinger, vice president of HSH.com. “There’s no better way to welcome the spring homebuying season than with rock-bottom mortgage rates.”
Sales of both new and existing homes are holding near multi-year highs, but inventories of homes available for sale remains tight. That may cause frustration for some potential homebuyers, since it represents a sea change from just a couple of years ago.
“Driven by low rates, there are more buyers in the market now but not much inventory available. Any so-called ’shadow inventory’, properties expected to flood the market when sales conditions improved doesn’t appear to be turning into real inventory very quickly. Also, some sellers may be holding out for higher prices before putting their homes on the market this spring. Whatever the reason, additional home sales are said to be held back for a lack of desirable inventory,” adds Gumbinger.
Purchase apps at highest point since 2010
Mortgage applications increased slightly on the news of lower rates. According to the Mortgage Bankers Association, total application volume was up just 0.2 percent for the week ending April 19.
Both the refinance index and the purchase index increased 0.3 percent from the week prior. The purchase index sits at its highest point since May 2010.
Despite the boost in purchase activity, refinances continue to make up 75 percent of all applications, with HARP refinances accounting for 32 percent of all refinance applications, the highest level since the MBA started tracking them in February 2012.