After weeks of heading up, mortgage rates reversed course this week, according to the latest data released by Freddie Mac.
The 30-year fixed-rate average fell to 3.54 percent with an average 0.8 point, a week after soaring to its highest point in nearly seven months. It was down from 3.63 percent a week ago and from 4.08 percent a year ago. Since climbing above 3.5 percent in late January, the 30-year fixed rate had held steady or increased in every week but one.
The 15-year fixed-rate average declined to 2.72 percent with an average 0.7 point. It was down from 2.79 percent a week ago and 3.3 percent a year ago. The 15-year fixed rate has remained below 3 percent for the past 10 months.
Hybrid adjustable-rate mortgages held steady for the most part. The five-year ARM remained the same at 2.61 percent with an average 0.6 point. The one-year ARM dropped to 2.63 percent with an average 0.4 point. It was 2.64 percent a week ago.
“Low and stable inflation is placing downward pressure on fixed mortgage rates,” Frank E. Nothaft, Freddie Mac vice president and chief economist, said in a statement. “Annual growth in the consumer price index has remained at or below 2 percent for the past four months, and for the producer price index even lower. This, in part, is why the Federal Reserve monetary policy committee on March 20th lowered the upper end of its inflation forecast for 2013. In addition, our March outlook calls for 30-year fixed mortgage rates to remain below 4 percent throughout this year.”
Meanwhile, mortgage applications showed a decline for the fourth time in five weeks, according to the Mortgage Bankers Association.
The Market Composite Index, a measure of loan application volume, fell 7.1 percent from the previous week. The Refinance Index decreased 8 percent, while the Purchase Index dropped 3 percent.
The refinance share of mortgage activity tumbled for the 10th straight week, accounting for 75 percent of total applications.