Mortgage Rates Show Small Decline

Mortgage rates eased back down slightly this week, remaining close to their all-time lows, according to today’s Freddie Mac rate survey.

Average interest rates on the popular 30-year fixed-rate mortgage fell to 3.39 percent with 0.7 points paid, down from 3.41 percent last week. That compares to an all-time low of 3.36 percent with 0.6 points set the week of Oct. 4.

Meanwhile, average rates on 15-year fixed-rate mortgages, widely used in refinancing, declined to 2.70 percent with 0.7 points, down from 2.72 percent last week. The all-time low of 2.66 percent with 0.6 points was set the week of Oct. 18.

Initial rates on five-year adjustable-rate mortgages (ARMs) were down a single basis point, to 2.74 percent with 0.6 points paid, down from 2.75 points last week. The all-time low on 5-year ARMs in the Freddie Mac survey is 2.69 percent with 0.6 points set the week of July 19.

Refinance demand slows

Though rates remain unusually low, refinance demand appears to be cooling off after an initial surge following the Federal Reserve’s announcement of a third round of “qualitative easing” on Sept. 13. The Mortgage Bankers Association (MBA) reported Wednesday that refinance applications last week declined by 6 percent, to their lowest level since late August.

Refinance applications hit their highest level since 2009 in early October in the wake of the Fed’s action but have been trailing downward ever since. Fixed mortgage rates fell about two-tenths of a percentage point in the weeks immediately after the Fed’s announcement.

Meanwhile, applications for home purchase mortgages have been showing small seasonally adjusted increases over the past four months and are at their highest level since June. On an annual basis, mortgage purchase applications last week were up 6 percent from the same week one year ago.

First published at: http://www.mortgageloan.com/mortgage-rates-show-small-decline-9282