‘Weak patch’ leads to lower mortgage ratesby Tim Manni
Rates on the most popular types of mortgages eased again, according to HSH.com’s Weekly Mortgage Rates Radar. The average rate for conforming 30-year fixed-rate mortgages fell by three basis points (0.03 percent) to 3.56 percent. Conforming 5/1 Hybrid ARM rates decreased by two basis points, closing the Wednesday-to-Tuesday wraparound weekly survey at an average of 2.60 percent.
“The economic engine has slowed in early spring, and consumer moods and spending patterns have downshifted of late. It’s hard not to think that a repeat of the pattern seen in 2011 and 2012 is in the offing,” said Keith Gumbinger, vice president of HSH.com. “Weak employment data for March has been backed up in recent days with soft reports on retail sales, arguably caused by the change in payroll tax withholding earlier this year,” he added.
Strong economic starts to each of the previous two years gave out under a myriad number of pressures, leaving sub-par growth as summer approached in each case.
“We are in a weak patch, at the very least,” notes Gumbinger. “However, falling gasoline prices should help add a little punch to consumer spending over time, and Federal Reserve policy continues to add important support for the economy and the housing market. For the moment, the dip in rates means ongoing opportunities to refinance and has arrived just in time for the spring home buying season.”
Applications up as mortgage rates fall
Overall, mortgage applications were up 4.8 percent for the week ending April 12, according to the Mortgage Bankers Association weekly survey.
Refinance applications increased by 5 percent last week, hitting their highest point since January. Purchase applications rose by a similar amount, up 4 percent, its highest level since May 2010.
Both the refinance and ARM share of application activity were unchanged at 75 percent and 5 percent, respectively.