Residential financing applications, rates head in opposite directions
Posted on Thursday, November 6, 2014 at 10:02:21 AM
Over the past month, residential financing rates dropped in drastic fashion. While that was welcomed by many consumers, the past few weeks have seen that trend reverse amid stronger economic data.
According to Freddie Mac, the 30-year fixed-rate mortgage averaged 4.02 percent for the week ending Nov. 6. Last week, that average was only 3.98 percent. On the other hand, the 15-year FRM averaged 3.21 percent this previous seven-day period, up from 3.13 percent the week before. Both adjustable-rate variants also increased.
"Mortgage rates continued to rise this week with the 30-year fixed-rate mortgage eclipsing the 4 percent mark," noted Frank Nothaft, vice president and chief economist at Freddie Mac. "The rate increases coincide with real GDP beating consensus expectations of 3 percent growth by growing at an annualized rate of 3.5 percent in the third quarter."
While residential financing rates are headed upward, mortgage applications are falling in the other direction. According to a recent report from the Mortgage Bankers Association, applications dropped 2.6 percent on weekly basis at the end of October. The Refinance Index also decreased 6 percent during that time period, while the overall refinance share of mortgage activity slipped to 63 percent from 65 percent.