Purchase applications rise as mortgage rates remain flatby Tim Manni
Rates on the most popular types of mortgages eased lower according to HSH.com’s Weekly Mortgage Rates Radar. The average rate for conforming 30-year fixed-rate mortgages fell by four basis points (0.04 percent) to 3.68 percent. Conforming 5/1 Hybrid ARM rates decreased by two basis points, closing the Wednesday-to-Tuesday wraparound weekly survey at an average of 2.65 percent.
“With a mixed bag of economic news lately, mortgage rates have found a little space to fall,” said Keith Gumbinger, vice president of HSH.com. “It’s not fully clear yet if the economy is losing some momentum from the changes to tax policy back in January and the effects of curtailed government spending as a result of the sequestration, but this does appear to be the case at the moment.”
One signal that could help provide clarity is the March employment report, due out on Friday.
“If the job market continues to solidify, the slowness we’re seeing lately will probably be little more than a temporary deceleration,” notes Gumbinger. “However, if hiring has slowed in March relative to the last few months, we could be in for a tepid economic period as the spring unfolds.”
Purchase apps up, refinances down
While mortgage application volume was down overall, the Mortgage Bankers Association reported an increase in purchase applications, which they say was caused by borrowers seeking FHA loans before the April 1 price increases.
“Total purchase applications increased last week, due to an almost 7 percent increase in purchase applications for government loans,” said Mike Fratantoni, MBA’s Vice President of Research and Economics, in a release. “This was likely driven by borrowers applying for loans prior to the scheduled increase in FHA premiums that took effect on April 1. “On a year over year basis, purchase applications are up about 4 percent, in line with the trend we are seeing in home sales volumes.”
Refinance applications were down 6 percent from the previous week, as the share of refinances ticked down 1 percent to 74 percent for the week. The share of HARP refinances also saw a 1 percent dip, landing at 28 percent for the week ending March 29.
The share of ARM applications held strong at 5 percent.