Mortgage rates fall, applications rise
After four straight weeks of increases, fixed mortgage rates recently decreased, according to data from the Mortgage Bankers Association’s latest Weekly Mortgage Applications Survey.
For the week ending April 15, 2011, the average contract interest rate for 30-year fixed mortgages fell to 4.83 percent, down from 4.98 percent the previous week. Average rates for 30-year fixed-rate mortgages has shown increases for four consecutive weeksbefore the Mortgage Bankers Association (MBA) published its latest report this morning.
The average rate for 15-year fixed-rate mortgages saw a significant decrease, as well. The average contract interest rate for 15-year fixed loans declined to 4.07 percent from 4.17 percent the prior week, the MBA said.
Average points for 30-year fixed mortgages increased to 1.07 from 0.93 the previous week, while average points for 15-year fixed loans decreased to 1.02, down from 1.22 the prior week.
Mortgage applicants increase
In addition to observing the decreases in average fixed mortgage rates, the MBA also noted an increase in mortgage applications week over week. For the week ending April 15, 2011, mortgage applications rose 5.3 percent from one week earlier.
“Purchase application volume jumped last week largely due to another sharp increase in applications for government loans,” Michael Fratantoni, MBA’s Vice President of Research and Economics, said. “Borrowers were likely motivated to apply for loans before the scheduled increase in FHA insurance premiums.”
Mortgage rates mostly edged higher in the latest week, with the average on 30-year fixed-rate mortgages rising slightly to 4.87%, according to Freddie Mac’s weekly survey.
Mortgage rates generally track U.S. bond yields, which move inversely to Treasury prices. Rates have climbed this year after slumping most of last year when prices rallies on economic uncertainty.
Freddie Chief Economist Frank Nothaft noted that rates were little changed after what he called “an encouraging employment report” from the Bureau of Labor Statistics.
The 30-year fixed-rate mortgage averaged 4.87% in the week ended Thursday, up from 4.86% the prior week but down from 5.21% a year earlier. Rates on 15-year fixed-rate mortgages were 4.1%, up from 4.09% the previous week but down from 4.52% a year earlier.
Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 3.72%, up from the prior week’s 3.7% but down from 4.25% a year earlier. One-year Treasury-indexed ARMs were 3.22%, down from 3.26% and 4.14%, respectively.
To obtain the rates, the five-year ARMs required payment of an average 0.6 point and the others required an average 0.7 point. A point is 1% of the mortgage amount, charged as prepaid interest.