Mortgage Rates Up Slightly, But Refinancing Index Tumbles

Mortgage applicationsLong-term mortgage rates increased only slightly this week from fresh lows set last week, but a widely-watched index measuring applications for refinancing tumbled 10 percent – as more mixed signals are given off by the stubbornly sluggish housing finance industry.
Freddie Mac said the 30-year fixed rate was at 4.21 percent this week, up from 4.19 percent last week. Last year at this time, the 30-year mortgage rate averaged 5.00 percent.
The benchmark 30-year rate, the most popular option for homeowners, set a new low last week, according to Freddie Mac records dating back to 1971.
The 15-year fixed rate came in at 3.64 percent, up from 3.62 percent. A year ago, it average. 4.43 percent.
Long-term rates have been under 5 percent for 24 consecutive weeks.
“Mixed inflation signals kept fixed mortgage rates at bay this week,” said Frank Nothaft, Freddie Mac vice president and chief economist. “The headline producer price index jumped 0.4 percent between August and September, which was quadruple the market consensus, while the consumer price index fell below the market forecast. Rates on the traditional 1-year and 5-year hybrid ARMs eased to all-time record lows.”
The Mortgage Bankers Association yesterday reported that its Refinance Index decreased 11.2 percent from the previous week, while its Purchase Index – gauging applications for the purchase of a home, decreased 6.7 percent from one week earlier.
Despite mortgage rates in record territory, the refinance share of mortgage activity decreased to 82.4 percent of total applications, from 83.1 percent the previous week, the MBA said.
There was a “sign of promise,” Nothaft pointed out, in a report out this week showing that new home construction on single-family homes rose 4.4 percent in September, the strongest pace since May.
In addition, homebuilder confidence rose in October to the strongest level since June, according to the NAHB/Wells Fargo Housing Market Index.

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