- Peter KingFebruary 01, 2012 - MortgageLoan.com
Wednesday, Feb 1, 2012
Demand for mortgage refinancing eased slightly last week, after the Federal Reserve indicated it would seek to keep interest rates low for the next three years.
"The Federal Reserve surprised the market last week by indicating that short-term rates were likely to stay at their current low-levels until the end of 2014,” said Michael Fratantoni, vice president of research and economics for the Mortgage Bankers Association (MBA). “Longer-term treasury rates dropped in response, and mortgage rates for the week were down slightly as a result.”
Refinance demand remains high
Applications to refinance an existing mortgage fell a seasonally adjusted 3.6 percent last week, according to the MBA, as mortgage rates backed off moderately from the previous week’s levels. Refinance demand remains strong however, according to Fratantoni, who noted that roughly 10 percent of all refinance applications were under the recently revamped Home Affordable Refinance Program (HARP).
Applications for mortgages to buy a home were down a seasonally adjusted 1.7 percent for the week, and were down 4.3 percent from the same level one year earlier.
Most mortgage rates down slightly
The MBA reports that average interest rates on 30-year fixed-rate mortgages were 4.09 percent last week, down from 4.11 percent previously, with 0.41 points paid in discounts and origination fees. Average rates on 30-year FHA mortgages were at 3.96 percent, down from 3.97 percent, with 0.61 points, while 30-year fixed-rate jumbo mortgages (above $417,000) averaged 4.33 percent with 0.41 points, down from 4.39 percent previously.
Average interest rates on 15-year fixed-rate mortgages dropped to 3.36 percent with 0.40 points, down from 3.40 percent previously, while initial interest rates on 5-year adjustable rate mortgages (ARMs) rose to 2.94 percent with 0.39 points, up from 2.91 percent the week before.
All rates are for the week ending Friday, Jan. 27 and are based on an 80 percent loan-to-value ratio. One point is equal to one percent of the loan amount.