Real Estate Notes
Mortgage interest rates down for second week as home loan applications rise
Mortgage interest rates declined for a second consecutive week as the number of home loan applications rose.
The rate for 30-year fixed mortgages fell to 4.95 percent for the week ended Thursday, from 4.97 percent the week before, according to mortgage finance company Freddie Mac. The average 15-year rate was 4.32 percent, down from 4.33 percent.
Rates on five-year adjustable mortgages averaged 4.05 percent, down from 4.11 percent, and rates on one-year adjustable mortgages fell to 4.22 percent, from 4.27 percent.
The rates do not include add-on fees known as points. One point is equal to 1 percent of the total loan amount.
The nationwide fee for loans in Freddie Mac's survey averaged 0.7 of a point for 30-year and 15-year loans and 0.6 of a point for five-year and one-year loans.
The Federal Reserve is winding down a program to purchase as much as $1.25 trillion in securities backed by U.S. home mortgages. The plan helped reduce rates over the last year, driving borrowing costs for 30-year fixed home loans to a record low of 4.71 percent in December. Mortgage rates could rise as the Fed program ends at the end of the month, said George Mokrzan, senior economist at Huntington National Bank in Columbus, Ohio.
"I still think rates are going up as the rest of the year goes on," Mokrzan said. "The odds, at this point, point to an improving economy and, with that, rising interest rates in general."
The Mortgage Bankers Association's index of mortgage applications rose 0.5 percent in the week ended March 5. The refinancing gauge fell 1.5 percent as the index to purchase a home rose 5.7 percent.
Bond purchases from Fannie Mae, Freddie Mac and Ginnie Mae, which buy home loans from lenders and package them into securities, brought down yields and allowed lenders to reduce mortgage rates while still selling the bonds at a profit.
-- From news services