Mortgage Rates Drop Again, But Applications Flat

By:: Kara Johnson | August 11, 2010

Mortgage activity remained relatively flat last week, despite the lowest interest rates ever reported by the Mortgage Bankers Association (MBA).

Applications for both mortgage refinances and home purchase mortgages rose less than a single percentage point, with refinance applications up 0.6 percent and purchase applications up 0.3 percent on a seasonally adjusted basis. The MBA described both as “essentially unchanged.”

Purchase applications have now risen for four consecutive weeks, although weakly, after falling steeply in the 10 weeks following the end of the homebuyer tax credit program. Even so, the MBA’s Purchase Index remains 34.1 percent below its level of one year ago. Refinances made up nearly four out of five mortgage applications this past week.

On a four-week moving average, purchase applications have risen 1.8 percent a week. Refinance applications have risen only 1.2 percent a week over the same period, despite historically low mortgage interest rates.

The average interest rate reported on 30-year fixed rate loans was 4.57 percent, down from 4.60 percent the week before, while rates on 15-year fixed-rate loans fell to 3.95 percent, down from 4.03 percent the week before. Both are the lowest reported since the MBA began tracking weekly rates in 1990.

According to government-backed secondary lender Freddie Mac, mortgage interest rates are now at their lowest in at least 50 years. FHA mortgages had interest rates below 4.5 percent from 1949-53, though there is no definitive information on conventional mortgages for the same period.

The MBA rates survey is based on loans with an 80 percent loan-to-value ratio and covers over 50 percent of all U.S. mortgage applications.

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Loan Type	Today	+/-
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15 yr fixed	3.03
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