For the first time in two months, mortgage rates increase
Posted on Thursday, March 3, 2016 at 10:07:48 AM
Market analysts everywhere are breathing a sigh of relief. For the first time in two months, mortgage rates have climbed rather than fallen. According to Freddie Mac's Primary Mortgage Market Survey, the 30-year fixed rate mortgage averaged 3.64 percent for the week ending March 3 - up slightly from 3.62 percent the week before. One year ago, the 30-year FRM averaged 3.75 percent.
"The market turbulence that kicked off the year subsided at the end of February, providing at least a temporary break in the flight to quality," said Sean Becketti, Freddie Mac chief economist, in a statement.
"Treasury yields approached their highest level in a month, boosting the 30-year mortgage 2 basis points this week to 3.64 percent. Despite this welcome breather, Fed officials have been highlighting the downside risks to the economic outlook, and the market expects the Fed to refrain from any further short-term rate increases for now," he said.
While residential financing rates finally reversed trend, mortgage applications continued to stumble. The Mortgage Bankers Association reported that applications fell 4.8 percent on a seasonally adjusted basis from one week earlier.
As has been the case through the early months of 2016, the fortunes of the Market Composite Index - MBA's measure of mortgage loan application volume - waned with a collapse of the Refinance Index, which dropped 7 percent from the previous week to its lowest levels since January.
The share of applications for FHA loans, meanwhile, did not change from the 12 percent position it held the week prior.