Interest rates drop back below 5 percent; Home loan applications decrease

Dennis Norman

The Mortgage Bankers Association (MBA) released its weekly mortgage applications survey for the week ending October30, 2009. The report showed an decrease of 1.8 percent in mortgage loan applications for a home purchase from the week before in spite of the fact interest rates slipped back below 5 percent again on a 30-year fixed-rate mortgage.

For the past four weeks mortgage applications for home purchases is down 5.0 percent which indicates to me we are probably going to see home sales numbers for October drop from the September pace as well.

Homeowners refinancing their existing mortgages continue to dominate the mortgage application activity with 66.1 percent of loan applications for the week being refi’s.

Interest rates and fees for the week:

• 30 year fixed-rate mortgage interest rates decreased to 4.97 percent from 5.04 percent the previous week, with fees decreasing to 1.01 percent from 1.25 percent on loans that are 80 percent of the value of the home.
• 15 year fixed rate mortgage interest rates decreased to 4.33 percent from 4.53 percent with fees increasing to 1.33 percent from .78 percent on loans that are 80 percent of the value of the home.
• One-year ARM interest rates increased to 6.83 percent from 6.79 percent with fees decreasing to 0.31 percent from 0.29 percent for loans that are 80 percent of the value of the home.

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