The average rate for a 30-year fixed-rate mortgage during the week ending Aug. 15 stayed right where it was the previous week at 4.4% while the average 15-year FRM rate inched up by just a basis point to 3.44%.
During the same period, the average starting rate for a five-year Treasury-indexed hybrid loan rose by four basis points to 3.23% and the average rate for a one-year Treasury adjustable-rate mortgage increased by five basis points to 2.67%.
Until recently, fixed mortgage rates had been bouncing aroundon market speculation that the Fed will taper some of its monetary stimulus. In fact, 65% of economists surveyed by Bloomberg expect the Fed to reduce the amount of bond purchases at its Sept. 17th and 18th monetary policy committee meetings, said Frank Nothaft, vice president and chief economist at Freddie Mac, in his weekly rate report.
Currently, mortgage rates on 30-year fixed mortgages are 1.1 percentage points above their all-time low set on Nov. 21, 2012, which translates into $125 more per month in mortgage payments on a $200,000 loan, he said.
A year ago, the average 30-year FRM rate was 3.62%, the average 15-year FRM rate was 2.88%, the average five-year hybrid rate was 2.76%, and the average one-year Treasury ARM rate was 2.69%.
The increase in fixed rates has taken a toll on refinancing and overall volume, but has been offset somewhat by a pickup in purchase mortgage business which is less rate-sensitive, according to Paul Anastos, CEO of Mortgage Master.
Its definitely had an impact on production, he said, estimated that there has been about a 25% drop 30% overall volume compared to the record low in rates.
However, he said the company is very pleased with the amount of purchases this year.
The whole year has been a good purchase year, Anastos said, noting that he remains optimistic when it comes to loan volume because this has sustained itself into summer.
Thats a nice trend, he said.