The 30-year fixed-rate mortgage (FRM) averaged 4.98 percent this week, barely down from last week’s 4.99 percent, according to Freddie Mac. Last year at this time, it was 5.10 percent.
Yet the Mortgage Bankers Association (MBA) said in its latest report that loan application volume fell to 10.9 percent on a seasonally adjusted basis for the week ending Jan. 22. Unadjusted, the change was 10.1 percent. Compared with the same week a year ago, there was 19.8 percent less activity. Said Michael Fratantoni, MBA’s vice president of research and economics:
“Refinance activity fell substantially last week. Although rates remain low, there appears to be a smaller pool of borrowers who are willing and able to refinance at today’s rates.”
Refinancings plunged 15.1 percent from the previous week and purchase loans, 3.3 percent seasonally adjusted. Unadjusted, purchase volume grew by 2.8 percent compared with the previous week and fell 4.5 percent lower than the same week one year ago.
The rate for the a 15-year fixed rate mortgage slipped to an average of 4.39 percent this week from 4.40 percent last week. A year ago, it was 4.80 percent a year ago.
The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.25 percent, down from last week’s 4.27 percent and last year’s 5.27 percent.
The one-year Treasury-indexed ARM was 4.29 percent this week in comparison with 4.32 percent the prior week and 4.90 percent one year ago.
Commented Frank Nothaft, Freddie Mac vice president and chief economist:
“Mortgage rates held steady this week ahead of the Federal Reserve’s (Fed) policy committee meetings. The Fed announced on January 27 that economic activity has continued to strengthen. It also noted that with substantial resource slack continuing to restrain cost pressures and with longer-term inflation expectations stable, inflation is likely to be subdued for some time.
“Last year was rough on the housing market. The number of new one-family housing starts hit a historical low of just under half-a-million units since records began in 1959. Similarly, new home sales were under 400,000 homes, an all-time record since data compilation began in 1963. Total existing home sales, however, rose to almost 5 million houses, which was the first annual increase in four years.”
Now, if mortgage lenders would actually start lending freely as well as responsibly, the low rates would be especially welcome.
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