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Following weeks of decline, mortgage rates reverse course

Posted on Thursday, October 30, 2014 at 10:21:41 AM

Over the past several weeks, residential financing rates continued to decline to yearly lows. That affordability encouraged a number of homeowners to refinance their existing mortgages, plus it inspired some to jump into the market altogether. While rates haven't exactly skyrocketed, a slight increase has reversed this recent trend.

According to Freddie Mac, the 30-year fixed-rate mortgage averaged 3.98 percent for the week ending Oct. 30. Below the 4.10 percent noted at the same time last year, this is still above the 3.92 percent reported last week. The 15-year FRM averaged 3.13 percent during this recent seven-day period, up from the previous reading of 3.08 percent. 

"Mortgage rates grew across the board this week, rebounding from the lowest rates of the year," explained Frank Nothaft, vice president and chief economist at Freddie Mac. "New home sales grew at an annual rate of 467,000 sales in September, the fastest rate observed during the recovery."

On the contrary to the small uptick in residential financing rates, the Mortgage Bankers Association reported that mortgage applications are headed in the opposite direction. For the week ending Oct. 24, applications dropped 6.6 percent compared to the prior seven-day period. The Refinance Index slipped 7 percent while the adjustable-rate mortgage share of activity fell to 8.2 percent.