Housing, economic data cause residential financing rates to drop
Posted on Thursday, March 6, 2014 at 9:51:09 AM
Over the past few weeks, stronger housing and economic data have caused residential financing rates to increase slightly. However, recent reports related to gross domestic product and other factors may have reversed this trend.
According to Freddie Mac, the 30-year fixed-rate mortgage averaged only 4.28 percent for the week ending March 6. That is down from the previous week, when it averaged 4.37 percent. The 15-year FRM also dropped, averaging 3.32 percent this week compared to last week's 3.39 percent. Both rates were still significantly higher on year-over-year levels, though.
Frank Nothaft, vice president and chief economist at Freddie Mac, attributed the changes this week to a revised GDP in the fourth quarter of 2013, as well as fewer new jobs created in the private sector. This change came as a slight surprise, as more growth was predicted.
In addition, applications for residential financing increased on a weekly basis for the week ending Feb. 28, according to the Mortgage Bankers Association. Overall, applications ticked up 9.4 percent during that time period. The refinance index also rose, up 10 percent from the previous week.