Drastic Move of Some Mortgage Rates
Below is a MRR and PLR article in category Finance -> subcategory Mortgage.
Significant Shifts in Mortgage Rates
Summary:
Recent data from the Freddie Mac Primary Mortgage Market Survey reveals a noticeable decline in short-term mortgage rates, which had been climbing sharply in previous weeks. Conversely, long-term rates have remained largely stable.
Detailed Analysis:
In the latest survey conducted by Freddie Mac, a notable trend emerged concerning mortgage rates. After several weeks of sharp increases, short-term mortgage rates experienced a slight downturn. Meanwhile, long-term rates showed minimal change.
30-Year Fixed Rate Mortgage (FRM):
The 30-year FRM increased marginally, moving from 6.45% to 6.46%, with accompanying points consistent at 0.5. By comparison, this rate was 6.47% at the same time last year.
15-Year Fixed Rate Mortgage:
This mortgage type averaged 6.15% with 0.5 points, a slight rise from the previous week’s 6.12%. Last year, it stood at 6.16%.
5-Year Treasury Indexed Hybrid Adjustable Rate Mortgage (ARM):
The 5-year ARM averaged 6.32% with 0.6 points, showing a minor decrease from the prior week’s 6.35%. This current rate is 19 basis points higher than in 2006.
1-Year Treasury Indexed Adjustable Rate Mortgage:
After a dramatic increase of 24 basis points to 5.84% with 0.8 points, this ARM settled back down by 10 basis points to average 5.74% with 0.6 points.
Expert Insights:
Frank Nothaft, Vice President and Chief Economist at Freddie Mac, noted that long-term mortgage rates remained steady due to recent economic indicators showing smaller-than-expected increases. For instance, the core personal consumption expenditure price index rose by only 1.3% in the second quarter, while the consumer spending data for July reported a 1.9% increase for the year ending in July.
Mortgage Bankers Association (MBA) Insights:
According to the MBA's Weekly Mortgage Applications Survey for the week ending September 7, the 30-year fixed rate mortgage saw a significant drop from 6.42% with 1.09 points to 6.25% with 1 point.
The 15-year fixed rate mortgage also decreased sharply to 5.9% with 1.03 points from 6.10% with 1.16 points. Meanwhile, the short-term 1-year ARM fell to 6.34% from 6.52%, with points remaining steady at 0.93.
Application and Refinancing Trends:
Overall mortgage application volume rose by 5.5% from the previous week on a seasonally adjusted basis, although it was down 16.7% compared to two weeks prior. Year-over-year, it showed a slight increase of 0.1%.
Refinancing activity increased, now accounting for 42.1% of total mortgage activity, up from 41.4% the previous week. However, the market share of adjustable-rate mortgages continues to decline, dropping from 13.2% to 12.6% week-over-week.
You can find the original non-AI version of this article here: Drastic Move of Some Mortgage Rates.
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