The Mortgage Bankers Association's Weekly Mortgage Applications Survey for the week ending Sept. 30 shows an overall decline in mortgage applications from the previous week, with the overall Market Composite Index falling 4.3% on a seasonally adjusted basis. Both new purchase applications and refinancings fell as well: seasonally adjusted purchase application volume dropped 0.8%, and refinance application volume fell 5.2%. According to the MBA, the only category of mortgage loan where application volume rose was for refinancings of government-guaranteed mortgages.
Meanwhile, mortgage rates for 30-year fixed-rate loans continued to sink to new lows on the MBA survey. The average rate for a 30-year conforming loan fell 6 basis points to 4.18% with an average 0.44 point, the average rate for a 30-year jumbo mortgage fell 4 points to 4.49% with an average 0.41 point, and the average rate for 30-year FHA-backed loans dropped 1 point to 4.05% with an average 0.69 point. While points rose for all three categories, effective rates dropped for all but the FHA loans. The average rate for a 15-year fixed-rate mortgage rose 3 points to 3.49% with points falling from 0.48 to 0.45, and the average rate for a 5-year ARM rose 7 points to 3.02% with points falling from 0.5 to 0.41. Effective rates for both of these loan categories increased from last week.
“Interest rates continued to fall last week, driven by the latest Federal Reserve actions to invest in longer-term Treasury and mortgage securities, but potential borrowers largely remained on the sidelines, seemingly unimpressed by the lowest (by any measure) mortgage rates since the 1940s,” said Mike Fratantoni, MBA’s vice president of research and economics. “Refinance application volume declined and purchase volume was little changed. Purchase borrowers continue to value the government lending programs that permit lower down payments. The government share of purchase applications decreased slightly to 41.6 percent last week, and while this is down from a recent peak of 50.4 percent in April 2010, it is still well above the pre-2009 survey average of 23.6 percent. Many refinance borrowers are opting to deleverage by moving to a 15-year term, with this product accounting for 27.0 percent of refinance volume last week.”
Mortgage rates also resumed their downward trek on the latest Bankrate.com weekly survey of large mortgage lenders. The benchmark rate for a 30-year fixed-rate mortgage plummeted 9 points to 4.21% with an average 0.43 points. The benchmark rate for 15-year fixed-rate loans and 5-year ARMs fell more modestly: the 15-year benchmark slipped 1 point to 3.46% and the 5-year ARM benchmark rate fell 2 points to 3.11%.
However, Bankrate.com notes that many borrowers have found it hard to get the super-low rates they have been reading about because lenders have kept rates higher than they could be in order to slow the incoming tide of applications. "Lenders have so many mortgages in pipelines and are getting so backed up that they have been increasing their rates" to slow the flow of new applications, Bob Moulton, president of American Mortgage in Manhasset, N.Y., told Bankrate. "It's happening more now [than a few weeks ago]."
Yet even though the downward slide has resumed, most lenders and analysts surveyed by Bankrate are convinced rates don't have much further to fall. More than half of the lenders surveyed for Bankrate's weekly Mortgage Rate Trend Index - 54% - say rates will rise in the coming week, and another 31% say they will hold steady (defined by Bankrate as moving 2 or fewer basis points in either direction). Only 15% said they would continue to fall.
Today's mortgage rates higher for day but lower for week on overnight surveys
If the day-to-day trends on the overnight surveys can serve as any guide, the lenders are right. If the week-to-week trends are the better indicator, they may have egg on their faces again next week.
Yesterday's average afternoon mortgage rates on the Zillow.com National Mortgage Marketplace, with changes from Tuesday and one week ago, are: 30-year fixed, 3.79% (+4 points, -10 points); 15-year fixed, 3.19% (+1 point, +1 point); 5-year ARM, 2.64% (-7 points, -9 points). Today's real-time rates as of 7 a.m., with changes from yesterday morning and afternoon, are: 30-year fixed, 3.8% (+4 points, +1 point); 15-year fixed, 3.18% (+2 points, -1 point); 5-year ARM, 2.51% (-16 points, -13 points).
This morning's average mortgage rates on the Bankrate.com overnight survey, with changes from yesterday and one week ago, are: 30-year fixed, 4.03% (+3 points, -7 points); 15-year fixed, 3.38% (+1 point, +2 points); 5-year ARM, 3% (+1 point, -2 points); 30-year fixed refinance loan, 4.13% (+2 points, -7 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 Zillow.com are for loans for the most creditworthy borrowers (FICO score of 720 or higher). One discount point represents one percent of the total value of a mortgage, paid as interest up front.