Dennis Norman
After last weeks increase in loan applications from borrowers buying homes which broke a string of five consecutive weeks of decreases, the Mortgage Bankers Association (MBA) weekly mortgage applications survey for the week ending June 18, 2010 decreased from the prior week. The MBA Purchase Index (a measure of the volume of loan applications related to a home purchase) decreased 1.2 percent for the week.
The four-week moving average of home purchase mortgage applications is down 0.5 percent.
The Mortgage Refinancing index decreased 7.3 percent as the refinance share of mortgage applications decreased to 73.8 percent this week from 74.8 percent last week.
In terms of whether interest rates will remain this low for some time or rise in the near future, the jury is out. Some economists are saying the Fed will be forced to keep interest rates low to help our struggling economy get back on it’s feet. Others say that interest rates will have to be increase to curb inflation as we move forward. At this point my take is this; rates are low…at near-record lows, so money is cheap. I’m doubtful it will stay this way as I suspect interest rates will increase in the coming months a modest amount, maybe just 1/2 – 1 percent, but increase nonetheless. However, I previously predicted that, after the Fed stopped buying mortgage-backed securities around the end of the first quarter of this year that rates would increase to 5.25 – 5.50 percent on a 30 year loan and was obviously wrong about that. Sometimes it’s good to be wrong. :)
Interest rates for the week ended June 11, 2010:
- 30 year fixed-rate mortgage interest rates decreased to 4.75 percent from 4.82 percent, with fees increasing to 1.07 percent from 0.89 percent on loans that are 80 percent of the value of the home.
- 15 year fixed rate mortgage interest rates decreased slightly to 4.19 percent from 4.23 percent, with fees increasing to 1.00 percent from 0.83 percent on loans that are 80 percent of the value of the home.
- One-year ARM interest rates decreased slightly to 7.05 percent from 7.07 percent, with fees remaining unchanged at 0.27 percent for loans that are 80 percent of the value of the home.
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