Mortgage Rates Show Mixed Results

Mortgage rates posted a mixed performance this past week, with the three leading weekly surveys showing significant disagreement over which way rates are headed.

The Bankrate.com survey reported that average rates on 30-year fixed mortgages declined slightly, a mere three basis points, to 5.55 percent, while the Freddie Mac and Mortgage Bankers Association both reported increases. Of those two, the MBA survey reported a major increase of over one-quarter percent, from 5.05 to 5.31 percent, while Freddie Mac reported a more modest increase of six basis points, bringing its average to 5.20 percent.

In part, the variations reflect differences in methodology and timing among the three surveys - the Bankrate survey tends to run higher, and the MBA survey lower, than the other two. The Bankrate and Freddie Mac surveys come out at midweek; the MBA survey covers the week ending the previous Friday. Even so, taken together they suggest that mortgage markets remain unsettled.

The main news affecting mortgage markets this week was Federal Reserve Chairman Ben Bernanke's testimony before the Senate on Wednesday, when he expressed confidence in the agency's ability to deal with inflationary pressures should they arise, and also indicated he saw no sign of such pressures for the foreseeable future.

His remarks are generally believed to be helping to bring rates down in the latter part of this rate, though it is not clear if they were late enough to have an influence on the Freddie Mac and Bankrate surveys.

On the MBA survey of last week's rates, the sharp jump apparently was enough to put a crimp in mortgage applications The MBA reported that mortgage applications were up only 2.8 percent last week, with refinances gaining 4.0 percent and home purchase mortgage applications up only 1.3 percent from the week before.

Refinance applications have fluctuated with changing rates in recent weeks, following a spike in rates in June. Mortgage applications for home purchases have tended to show small but relatively consistent increases in recent weeks as home buyers seek to take advantage of low prices and a tax credit for first time buyers.