30-year falls to 5.77%
By COCO SALAZAR
10/3/2003

Refinance loans took a leap, and for the fourth week in a row, rates lowered.

Refinance applications increased by 3.2%, bringing the Refinance Index to 2506.8, reported the Mortgage Bankers Association of America (MBA). The prior week's Refinance Index stood at 2429.7. The refinance share of mortgage activity also increased from 51.9 percent to 53.1 percent.

Overall applications followed the upward path, according to MBA's Weekly Mortgage Applications Survey. MBA's Market Composite Index stood at 707.2, an increase of 1.1% from last week's 699.6. A year ago, the index stood at 1285.4 -- its highest level ever up to that point.

The average 30-year fixed rate fell 21 basis points (BPS), according to Freddie Mac's Primary Mortgage Market Survey. Last week's rate of 5.98% fell to 5.77%, while a year ago, the average 30-year was reported at 6.01%.

Freddie reported the average 15-year fixed rate mortgage fell to 5.10% from 5.30% the prior week.

The average 1-year adjustable-rate mortgage fell to 3.72% this week, with a difference of 5 BPS from last week, according to Freddie's survey. The ARM share of activity in MBAs report increased to 23.4 percent from the previous week's 22.7 percent.

Markets forecasted that the lack of job growth could cause a lull in the recovery of the economy -- causing interest rates to fall this week, said chief economist Frank Nothaft in Freddie's survey. He added that this week's release of September employment numbers could cause a market reaction and "potentially alter the momentum of mortgage rate change in the near future."

The economist was right on; today's favorable employment numbers released by the Department of Labor have sent the stock market into a frenzy while devastating the 10-year Treasury-note -- which today saw its yield 18 BPS higher than yesterday's close. During late morning trading the yield was at 4.17%, while the price was down 1.46875 to 100 19/32.

According to Bankrate.com's surveyed panel of banking and mortgage professionals, 42% anticipate rates will fall. On the other end, 33% expect higher rates and 25% said rates will remain the same.

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