Mortgage rates show slight rise this weekby Tim Manni
Rates on the most popular types of mortgages held steady this week, according to HSH.com’s Weekly Mortgage Rates Radar. The average rate for conforming 30-year fixed-rate mortgages rose by three basis points (0.03 percent) to 4.53 percent. Conforming 5/1 Hybrid ARM rates decreased by a single basis point, closing the Wednesday-to-Tuesday wraparound weekly survey at an average of 3.37 percent.
“Mortgage rates are holding pretty stable as markets await new signals about the economy and Fed policy,” said Keith Gumbinger, vice president of HSH.com. “In fact, this week’s change in the average 30-year fixed rate mortgage was the smallest weekly move in almost two months.”
The Federal Reserve would like to begin winding down QE3, the central bank’s latest Quantitative Easing program of purchasing mortgage-backed securities and Treasury bonds, perhaps as soon as September. However, economic growth remains “modest,” according to the Fed, and it’s not yet clear that a reduction in support for the economy is warranted.
“Data scheduled for release over the next several weeks will be key,” added Gumbinger. “With mortgage and other interest rates holding near their highest levels of the year, we’ll start to see if housing activity has slowed, or by how much, and discover if the Fed makes a change. At the moment, despite a soft economy, it looks as though it will, but time will tell.”
Little change in mortgage applications
For the first time in what feels like a while, mortgage applications rose from the previous week. According to the Mortgage Bankers Association, overall applications were up just 0.2 percent for the week ending August 2.
Both refinance applications and the overall share of refinances were unchanged from the week prior, while purchase applications increased by 1 percent.
The HARP share of refinances fell by 1 percent to 36 percent, and the of ARMs remained stable at 6 percent of all applications.