Mortgage rates continue to test historical lows
Three mortgage types register new all-time low rates
Mortgage rates were mixed this week, as two mortgage types saw slight increases and three set new all-time record lows, the Mortgage Bankers Association (MBA) said.
According to the MBA’s Weekly Mortgage Applications Survey for the week ending October 5, 2012, overall mortgage activity – measured my mortgage loan application volume – decreased alongside mixed data on current mortgage rates.
Average rates for 30-year fixed mortgages (those with conforming loan balances of $417,500 or less) increased to 3.56 percent from 3.53 percent the previous week. This was the first average rate increase seen in six weeks, the MBA noted.
Rates for 5-year adjustable-rate mortgages (ARMs) also increased slightly week-over-week – from 2.59 percent to 2.60 percent.
New all-time record low rates reached
However, the three other mortgage types analyzed in the MBA survey all reached new all-time record low averages.
Jumbo (those with loan balances greater than $417,500) 30-year fixed mortgages decreased to an average rate of 3.74 percent from 3.82 percent the previous week, while FHA-backed 30-year fixed-rate mortgages dropped to an average rate of 3.34 percent from 3.37 percent.
In addition, average rates for 15-year fixed-rate mortgages also hit new all-time record lows, decreasing from 2.90 percent to 2.88 percent week-over-week.
Mortgage activity declines
Despite the record-breaking rate activity, mortgage activity overall declined, the MBA said.
Overall, activity decreased 1.2 percent on a weekly basis, led by a 2 percent weekly fall in the MBA’s Refinance.
The MBA’s Purchase Index increased 2 percent week-over-week, but with 83.0 percent of activity associated with refinancing, the Refinance Index drop had a larger impact on overall activity numbers.
“Refinance applications declined somewhat last week although volume is still near three-year highs, and purchase applications increased to the highest level since June, with both conventional and government volumes increasing,” Mike Fratantoni, MBA’s Vice President of Research and Economics, said in a statement.
Fratantoni continued: “Rates on 30-year fixed-rate loans remain historically low, benefitting both prospective homebuyers and those seeking to refinance.”