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30-Year Fixed-Rate Mortgage Over 5 Percent
30-year fixed-rate mortgage: Averaged 5.05 percent with an average 0.7 point for the week ending February 25, 2010, up from last week when it averaged 4.93 percent. Last year at this time, the 30-year FRM averaged 5.07 percent.
The 15-year fixed-rate mortgage: Averaged 4.40 percent with an average 0.7 point , up from last week when it averaged 4.33 percent. A year ago at this time, the 15-year FRM averaged 4.68 percent.
Five-year indexed hybrid adjustable-rate mortgages ARMs: Averaged 4.16 percent this week, with an average 0.6 point, up from last week when it averaged 4.12 percent. A year ago, the 5-year ARM averaged 5.06 percent.
One-year Treasury-indexed ARMs: Averaged 4.15 percent this week with an average 0.6 point, down from last week when it averaged 4.23 percent. At this time last year, the 1-year ARM averaged 4.81 percent.
Freddie Sayz
Interest rates for 30-year fixed mortgages followed long-term bond yields higher and rose above 5 percent this week amid a mixed set of economic data reports said Frank Nothaft, Freddie Mac vice president and chief economist. For instance, the January producer price index jumped well above the market consensus, but the consumer price index remained subdued and consumer confidence declined to the lowest level since April 2009, according to the Conference Board .
There were also varying reports as to the current state of the housing market. The S&P/Case-Shiller national home price index rose for the third consecutive quarter in the fourth quarter, albeit at a slower rate, and the 20 city composite index showed an increase in December 2009 for the seventh month in a row; six metropolitan areas experienced positive year over year growth, compared to four in November. New home sales, however, unexpectedly slowed in January to the smallest pace since records began in 1963, and the supply of homes at the current sales rate rose to 9.1 months, the most since May 2009.
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Mortgage Bankers Association for the week of 2/24/2010
Market Composite Index: (loan application volume) decreased 8.5 percent on a seasonally adjusted basis from one week earlier
Refinance Index: decreased 8.9 percent from the previous week. The seasonally adjusted Purchase Index decreased 7.3 percent from one week earlier, putting the index at its lowest level since May 1997.
Purchase Index: decreased 3.6 percent compared with the previous week and was 13.4 percent lower than the same week one year ago.
Refinance Share of Mortgage Activity: decreased to 68.1 percent of total applications from 69.3 percent the previous week.
Arm Share: increased to 4.7 percent from 4.4 percent of total applications from the previous week.
MBA outlook: (Excerpted from mbaa.org)
The economy is growing again. 4Q growth of 2009 exceeded expectations due to strong growth in business inventories. However inventory replacement is a short lived spurt, unless consumers buy. Weakness in the job market and a fragile recovery are likely to keep consumers from spending on big ticket items like houses and cars.
Existing home sales fell back in December and new home builders are not upbeat. The Fed remains unlikely to raise rates, however, they are going to end their MBS purchase program. This will certainly cause a rise in interest rates as the marketplace demands higher rates to compensate for risk.
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