Mortgage rates, applications headed in different directions
Posted on Thursday, October 31, 2013 at 10:31:54 AM
Over the past several months, it appeared that residential financing rates were attached to the end of a yo-yo. Now, another week has passed and with it, another reported decrease.
According to recent data from Freddie Mac, fixed mortgage rates dropped once more, for the second week in a row. The 30-year FRM averaged 4.10 percent, while last week's figure was 4.13 percent. At this point in 2012, it was only 3.39 percent.
"Fixed mortgage rates eased further leading up to the Federal Reserve's Oct. 30 monetary policy announcement," said Frank Nothaft, vice president and chief economist of Freddie Mac. "The Fed saw improvement in economic activity and labor market conditions since it began its asset purchase program, but noted the recovery in the housing market slowed somewhat in recent months and unemployment remains elevated. As a result, there was no policy change which should help sustain low mortgage rates in the near future."
Additionally, mortgage applications trended in the opposite direction than residential financing rates. According to the Mortgage Bankers Association, applications rose 6.4 percent during the last week in October, compared to the previous week. Also, mortgage refinancing activity grew to a share of 67 percent, highest since June of this year.