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Mortgage rates, applications head in opposite directions

Posted on Thursday, February 6, 2014 at 10:09:58 AM

Over the past year, conditions within the housing market have been fluctuating drastically. At the moment, weaker housing data has further contributed to the decline in residential financing rates, while another key statistic - applications - is headed in the other direction.

According to Freddie Mac's recent Primary Mortgage Market Survey, fixed mortgage rates have dipped down once more on a week-over-week basis. The current 30-year fixed-rate mortgage averaged 4.23 percent for the week ending Feb. 6, compared to the previous level of 4.32 percent. The 15-year FRM has also declined, now at 3.33 percent compared to 3.40 percent. 

Frank Nothaft, vice president and chief economist for Freddie Mac, attributed the changes to current housing data. He stated that a decline in pending home sales was a contributing factor, as was a slower manufacturing industry.

While rates have dropped, applications for residential financing remain on the way up. According to the Mortgage Bankers Association, these ticked up 0.4 percent for the week ending Jan. 31 from one week earlier. In addition, the refinance share of mortgage activity remained unchanged, at 62 percent, while the share of adjustable-rate mortgages rose to 8 percent for the week.