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Mortgage rates, applications remain on separate paths

Posted on Friday, February 27, 2015 at 7:46:35 AM

For a while at the beginning of 2015, it seemed that residential financing rates would never increase. However, that has changed over the past few weeks, as mortgage rates and applications appear headed down different paths.

According to Freddie Mac, the 30-year fixed-rate mortgage averaged 3.80 percent for the week ending Feb. 26, up from its previous level of 3.76 percent. The 15-year FRM averaged 3.07 percent, up from 3.05 percent.

According to Len Kiefer, deputy chief economist for Freddie Mac, this marks three weeks in a row with residential financing rate gains.

"New home sales beat market expectations at an annual pace of 481,000 units, down slightly from 482,000 units in December, but up 5.3 percent from a year ago," he added. "Also, the S&P/Case-Shiller National House Price Index rose 4.6 percent over the 12-months ending in December 2014."

In addition, mortgage applications continue to decline as the rate increases. The Mortgage Bankers Association reported that applications dropped by 3.5 percent for the week ending Feb. 20. The refinance share of mortgage activity slipped to 62 percent, down from the previous week's 66 percent.