Mortgage applications rise while house prices, today's bank mortgage rates hold steady

Sandy Smith's picture

Both home prices and bank mortgage rates are virtually unchanged on the latest national surveys, while mortgage application volume rose 4.9% in the previous week.

Continued uncertainty over the final shape of a euro bailout package continues to send stock markets on wild gyrations, but the turbulence appears not to be roiling the bond and mortgage rate markets right now. Other concerns, such as moving backlogged foreclosures through the system, helping underwater homeowners refinance their mortgages, and the overall health of the housing market as reflected in home prices, are uppermost in the minds of lenders, borrowers and policy makers.

The overall health of the market remains weak, if the latest S&P/Case-Shiller Home Price Indices are any guide, but there are some signs of future improvement. House prices in the 20 metropolitan areas the indices follow rose for the fifth straight month in August, but the rise was slight - only 0.2%. Half of the 20 metros saw house prices fall in August, though the declines were slight, with the largest drop being a 2.4% fall in Atlanta. On an annual basis, prices rose in only two of the 20 - Detroit, up 2.7%, and Washington, DC, up 0.3%. However, the annual rates of change rose in 16 of the 20 metros in August, a development S&P Index Committee Chairman David M. Blitzer called "a modest glimmer of hope for the housing market."

Roughly steady mortgage interest rates over the past week have also brought borrowers out of the woodwork. Mortgage application volume in the week ending Oct. 21 rose 4.9% on a seasonally adjusted basis on the Mortgage Bankers Association's Weekly Mortgage Applications Survey. Both new purchase and refinance loan applications climbed in volume last week, with the seasonally adjusted Purchase Index rising 6.4% from the previous week and the Refinance Index rising 4.4%.

Average mortgage rates last week were essentially flat, according to the MBA survey, with movements of 2 or fewer basis points in almost all categories. The average rate for 30-year fixed-rate conforming mortgages held steady at 4.33%, with discount and origination fee points falling from 0.48 to 0.47. The average rate for 30-year fixed rate jumbo mortgages rose 4 points to 4.68%, with points falling from 0.45 to 0.42. The average rate for FHA-guaranteed 30-year fixed mortgages slipped 1 point to 4.11% while points rose from 0.53 to 0.61. The average rate for 5-year ARMs went up 1 point to 3.62%, with points rising from 0.43 to 0.45, and the average rate for 1-year ARMs went up 3 points to 3.11%, with points rising from 0.48 to 0.50. Effective interest rates went up for all categories except 30-year conforming mortgages.

Today's mortgage rates move weakly on overnight surveys

Both day-to-day and week-to-week changes in mortgage interest rates on the national overnight surveys showed no clear direction, with only weak changes regardless of direction.

Yesterday's average afternoon mortgage rates on the National Mortgage Marketplace, with changes from Sunday and one week ago, are: 30-year fixed, 4% (+3 points, +1 point); 15-year fixed, 3.35% (unchanged, +1 point); 5-year ARM, 2.83% (-1 point, -2 points). Today's real-time rates as of 12 noon, with changes from Monday morning and yesterday afternoon, are: 30-year fixed, 3.92% (-7 points, -8 points); 15-year fixed, 3.33% (unchanged, -2 points); 5-year ARM, 2.72% (-9 points, -11 points).

This morning's average mortgage rates on the overnight survey, with changes from Monday and one week ago, are: 30-year fixed, 4.2% (+3 points, +1 point); 15-year fixed, 3.47% (+2 points, +1 point); 5-year ARM, 3.02% (+1 point, -2 points).

One basis point equals one hundredth of a percentage point. Rates reported in this article assume good credit (FICO score of 650 or higher) and a 20% down payment. Morning rates from are for loans for the most creditworthy borrowers (FICO score of 720 or higher). One discount point represents one percent of the total mortgage amount, payable as interest up front.

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