Apps fall, rates hold
By SAM GARCIA
4/25/2003

The number of prospective borrowers that completed form 1003 -- the Uniform Residential Loan Application -- fell last week, and rates were mostly unchanged but may rise later this year.

Fueled mostly by an 8% drop in refinance applications, the Market Composite Index of mortgage loan applications released by the Mortgage Bankers Association of America (MBA) fell to 1055.8 from 1134.6 the previous week. Applications are more than double year-ago levels.

Originators this past week were likely preoccupied with closing the record rush of applications that resulted from rates bottoming out a little over a month ago.

MBA said refinance applications represented 68% of all applications.

Mortgage rates barely budged last week. The average 30-year fixed rate mortgage was 5.79%, according to the Primary Mortgage Market Survey by Freddie Mac, down from 5.82% the prior week and 6.88% a year ago. At 5.12%, the 15-year was unchanged, and the average one-year Treasury-indexed adjustable-rate mortgage was 3.79% -- also unchanged.

"A tepid national economy has anchored mortgage rates to current low levels so far this year," said Freddie's chief economist Frank Nothaft.

In an article today, the Wall Street Journal said with the war in Iraq essentially over, most economists and Federal Reserve officials believe the economy will begin growing faster during the second half of the year.

A weak economy and sour stock market have helped mortgage rates fall to their lowest level in decades. A growing economy could signal an end the biggest refinance wave in history.

During mid-morning trading, the 10-year Treasury Note was yielding 3.88%, down 3 basis points from yesterday. The price of the 10-year was $99 28/32, up $0.3125.

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