Rates, Purchase Apps Up
April 30, 2004
Average 30-year over six percent
By Coco Salazar
MortgageDaily.com
With more prospective home shoppers looking to buy a property, application activity for purchase money mortgages improved. And while rates have climbed for six consecutive weeks, an upcoming employment report and a speech anticipated by the Fed will mark their future direction.
Breaking away from a five-week descent, the Market Composite Index, or the combined measure of refinance and purchase loan application activity, rose 0.5% from the prior week to 748.0, the Mortgage Bankers Association of America (MBA) reported. In the group's Weekly Mortgage Applications Survey a year ago, the index was at 1050.8.
The slight improvement was due to an increase in purchase application activity, reflected by the 6.8% jump to 463.5 in the Purchase Index, the Washington, D.C. trade association said.
The Refinance Index continued its downward path as it fell 5.8% from the prior week to 2403.0. The refinance share of total mortgage applications dropped to 44.0% from 47.3% one week earlier.
The average for the 30-year fixed rate mortgage came in at 6.01%, up 7 basis points (BPS) from last week, according to Freddie Mac's latest Primary Mortgage Market Survey. A year ago, it averaged 5.70%.
The 15-year average rose 10 BPS from last week to 5.35%, the government-sponsored enterprise reported.
Up six BPS from last week, Freddie said the 1-year Treasury-indexed adjustable-rate mortgage averaged 3.75%, while the MBA reported the ARM share of total application activity increased to 32.7% from 31.7% the previous week.
Freddie's said that after today's release of the Gross Domestic Product figures, the market began weighing which part, economic growth or inflation, is most dominant.
"Perhaps next week's Federal Reserve Board meeting and the release of April employment numbers will help the market find a balance between the two influences," Freddie's deputy chief economist Amy Cutts said in a written statement.
Bankrate.com, which surveys industry experts weekly, said rates seem to have reached their equilibrium for the next month and a half -- 57% of the panelists predicted rates will stay about the same (plus or minus 2 BPS), 29% believe rates will drop and only 14% say rates will rise.
Bankrate.com's senior financial analyst voted for an upturn noting that "more evidence of strong job growth will push rates higher, but at a more modest pace."
During late afternoon trading Thursday, the 10-year Treasury-note yield was up 5 BPS to 4.55%, and the price was down $0.40625 to 95 21/32.
Copyright: MortgageDaily.com
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