Mortgage rates reverse course

Since the run-up to their highest levels in more than a year, mortgage rates have backed off in the past couple of weeks, according to the latest data released by Freddie Mac.

The 30-year fixed-rate average declined for the second week in a row, falling to 4.31 percent with an average 0.8 point. It was down from 4.37 percent a week ago, but up from 3.49 percent a year ago. Since surging past 4 percent at the end of last month, the 30-year fixed rate has refused to drop below that mark.

The 15-year fixed-rate average also tumbled, falling to 3.39 percent with an average 0.8 point. It was 3.41 percent a week ago and 2.8 percent a year ago. The 15-year fixed rate has hovered above 3 percent for the past two months.

Hybrid adjustable rate mortgages were down, too. The five-year ARM slid to 3.16 percent with an average 0.7 point. It was 3.17 percent a week ago.

The one-year ARM fell to 2.65 percent with an average 0.4 point. It was 2.66 percent last week.

“Mortgage rates eased for the second consecutive week, which should help to alleviate market concerns of a slowdown in the housing market,” Frank E. Nothaft, Freddie Mac vice president and chief economist, said in a statement.

“Existing home sales for June were the second highest since November 2009 and new home sales were the strongest since May 2008. In addition, the low inventories of homes for purchase are putting upward pressure on house prices. For instance, the FHFA purchase-only house price index increased for the 16th consecutive month in May and was 7.3 percent above the May 2012 figure; May’s index level was the highest since September 2008.”

Meanwhile, fewer people are applying for mortgages, according to the latest data from the Mortgage Bankers Association.

The Market Composite Index, a measure of total loan application volume, fell 1.2 percent from the previous week. The Refinance Index dropped 1 percent, while the Purchase Index decreased 2 percent.

The refinance share of mortgage activity, which last week sank to its lowest level since April 2011, remained unchanged at 63 percent of total applications.

 

Kathy Orton is a reporter and Web editor for the Real Estate section. She covers the Washington metropolitan area housing market.
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