Weekly mortgage activity
By CHRISTY ROBINSON
12/13/2002

Mortgage loan applications gathered more dust last week, but the first mortgage rate dip in a month may bring them off the shelf again.

Freddie Mac's weekly market survey found a lowered 30-year fixed-mortgage rate average of 6.04% for the week ending Dec. 13. That's a decrease from last week's 6.19%, and from the 7.09% the same time last year.

Nationally, the 30-year was highest in the North Central states at 6.13%, and lowest in the West at 5.96%.

News of November's 6.0% unemployment rate brought disappointment to the financial markets, causing mortgage rates to drop, said Freddie's chief economist Frank Nothaft.

"The lack of any job growth stalls the economic recovery and, in the long run, dampens the potential growth of the housing industry," he said. "On the other hand, Freddie Mac's most recent economic forecast indicates that next year's housing sector, though slower than this year's, will nevertheless continue to thrive in 2003."

Freddie also revealed the average 15-year to be 5.46% this week, down from 5.60% a week ago. Last year at this time, the 15-year was 6.57%.

One-year Treasury-indexed adjustable-rate mortgages (ARMs) fell to 4.18% from last week's 4.21% average. Last year's ARM was 5.19%.

Mortgage loan applications slowed down to 862.7 for the week ending Dec.6, according to the Mortgage Bankers Association of America (MBA) weekly index, which runs a week behind Freddie's rate survey.

That seasonally adjusted number is an 8.1% decrease from the previous week's 939.0. It's still almost 25% ahead of last year's 693.2, however.

Refinancing activity represented 70.0% of total applications, increasing a bit from 69.5% the previous week, the index showed.

Market strategists anticipated the mortgage rate decrease this week, but they say the 30-year will have to dip below 6.0% to new lows before the refinancing wave charges back up, Dow Jones Newswires reported.

Bankrate.com's weekly survey asks mortgage experts to gauge rate activity over the next 30 to 45 days, and this week's group is full of positive presumptions.

Just 10% of those polled said mortgage rates will rise over the next five weeks. The other 90% is split evenly between those who said rates will decrease and those who said rates will stay about the same (within 2 basis points).

"Rate shoppers are in a good position this holiday season. We may see a slight dip in rates between now and the end of the year if stocks rise," said Jason P. Flurry, CFP of Planmark Capital Management in Alpharetta, Ga., who predicted that rates will stay unchanged, according to Bankrate.com. "But, most likely today's levels will hold for the next couple of weeks. It is not too late to make a move if you have been holding out."

Article © MortgageDaily.com All Rights Reserved