Mortgage Activity Holds
March 26, 2004
Rates, activity mostly unchanged
By Coco Salazar
Loan originators were still busy taking 1003 loan applications last week as the share of refinances reached the highest level since last summer. Strong originations can be attributed to the current low rate environment -- which, given no economic surprises, should hold for a while.
Following a surge in mortgage applications the previous week, activity was slightly off this week, the Mortgage Bankers Association of America (MBA) reported. This was shown by the 0.2% drop to 1114.9 in the Market Composite Index, according to the group's latest Weekly Mortgage Applications Survey. Last year at this time, the measure of purchase and refinance applications stood at 1520.9.
The MBA reported the Purchase Index nudged down 0.8% from the previous week to 448.9.
Meanwhile, the Refinance Index rose 0.1% to 4988.7, and the share of refinance applications edged up to 63.1% of total applications -- the highest level since mid-July, said MBA.
The share of adjustable rate mortgage (ARM) applications rose to 28.1% of total applications from 27.9% the previous week, reported MBA. Meanwhile, Freddie Mac said the 1-year ARM average was 3.36% this week -- down 3 basis points from last week and the lowest it has been at in over 20 years.
As for long-term rates, the 30-year fixed rate mortgage averaged 5.40% this week, edging up just 2 basis points from last week, according to Freddie's latest survey of 125 lending thrifts. A year ago, the average was 5.91%.
The 15-year at 4.70% was also barely unchanged from last week, said the government-sponsored enterprise.
"As long as general inflation remains in check, we expect mortgage rates will stay in their current range, and that will leave open the window of opportunity for refinancers and potential home buyers," said Freddie's chief economist in the announcement.
According to the panel surveyed by Bankrate.com, rates will either rise (50% predicted) or remain where they are now (50% predicted). None of the panelists forecast lower rates.
"If any hint of job growth is seen in the April 2 employment report, mortgage rates could rebound," said the site's senior financial analyst who voted rates would rise. "Further disappointment would aid mortgage shoppers, but floating the rate beyond April 1 is rolling the dice."
The 10-year Treasury-note closed Thursday at 102 4/32 with a yield of 3.74%.