Mortgage Rates Resume Search for Bottom

Demand for purchase loans in same range for 3 years

By Inman News, Thursday, June 21, 2012

Mortgage rates hit new lows this week, still searching for a bottom after pausing last week from six consecutive weeks of declines.

Rates on 30-year fixed-rate mortgages (FRM) averaged 3.66 percent with an average 0.7 point for the week ending June 21, down from 3.71 percent last week and 4.50 percent a year ago, Freddie Mac said in releasing the results of its latest Primary Mortgage Market Survey. That’s a new low in Freddie Mac records dating to 1971.

For  15-year fixed-rate mortgages, rates averaged 2.95 percent with an average 0.6 point, down from 2.98 percent last week and 3.69 percent a year ago. Rates for 15-year loans — a popular refinancing option — hit an all-time low in records dating to 1991 of 2.94 percent the week ending June 7.

Rates on 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) loans averaged 2.77 percent with an average 0.6 point, down from 2.80 percent last week and 3.25 percent a year ago. That’s a new low in records dating to 2005.

For 1-year Treasury-indexed ARM loans, rates averaged 2.74 percent with an average 0.5 point, down from 2.78 percent last week and 2.99 percent a year ago.  Rates on one-year ARMs hit an all-time low in records dating to 1984 of 2.72 percent during the week ending March 1.

Treasury bond yields eased somewhat this week on some worsening economic indicators bringing mortgage rates back into record low territory, Freddie Mac Chief Economist Frank Nothaft said in a statement.

Looking back a week, a separate survey by the Mortgage Bankers Association showed demand for purchase loans fell a seasonally adjusted 9 percent during the week ending June 15 compared to a week earlier. Demand for purchase loans was down 2 percent from the same time a year ago.

The weekly decline in purchase loan applications was likely “a recalibration following the Memorial Day holiday, as the level of activity remains within the narrow band seen for the past three years,” said Michael Fratantoni, the MBA’s top economist.