30-Year Rates Creep Up Again As Loan Applications Decline
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Saturday, May 16, 2009
Rates on 30-year mortgages rose slightly for the second straight week but remained below 5 percent, Freddie Mac said Thursday.
The average rate for a 30-year, fixed mortgage was 4.86 percent, up from 4.84 percent last week. Rates have been below 5 percent for nine weeks.
"It could've been worse," said Donald Rissmiller, chief economist at Strategas Research Partners. "That's still pretty good. To the extent the Fed is watching mortgage rates, which they are, this data is okay."
A record low of 4.78 percent for a 30-year, fixed rate mortgage was first recorded the week of April 2 and again the week of April 30. Freddie Mac's survey dates to 1971. Last year at this time, the average rate for a 30-year fixed mortgage -- the most popular loan among home buyers -- was 6.01 percent.
Mortgage rates fell significantly over the winter. They slid again after the Federal Reserve said in March that it would buy $1.2 trillion in mortgage-backed securities and $300 billion in long-term government debt, which traditionally influences rates on 30-year home loans.
Mortgage applications in the United States fell last week as homeowners slowed refinancing and purchases were little changed. The Mortgage Bankers Association's index of applications to buy a home or refinance a loan fell 8.6 percent in the week ended May 8 from the previous week. Purchase applications rose 0.5 percent, while requests to refinance fell 11 percent.
Home prices are being driven down in part by a record number of foreclosed properties. A total of 342,038 households received a default or auction notice or were seized last month, RealtyTrac said this week. One in 374 households got a filing, the highest monthly rate since the property data service began issuing such reports in 2005.
Freddie Mac collects mortgage rates from lenders around the country every Monday through Wednesday. Actual rates often fluctuate, even within a given day. The low rates have spurred refinancing activity, though consumers must have solid credit to get the best rates.
The mortgage finance giant said the average rate on a 15-year, fixed-rate mortgage was 4.52 percent, up from 4.51 percent last week.
Rates on five-year, adjustable-rate mortgages averaged 4.82 percent this week, down from 4.9 percent, Freddie Mac said. Rates on one-year adjustable mortgages fell to 4.71 percent from 4.78 percent last week.
Borrowers can lower their interest rate by buying points, which cost 1 percent of the loan amount. The nationwide average was 0.6 point for the loans covered in Freddie Mac's report.
