Rates, Purchase Apps Up

April 30, 2004

Average 30-year over six percent

By Coco Salazar
MortgageDaily.com

With more prospective home shoppers looking to buy a property, application activity for purchase money mortgages improved. And while rates have climbed for six consecutive weeks, an upcoming employment report and a speech anticipated by the Fed will mark their future direction.

Breaking away from a five-week descent, the Market Composite Index, or the combined measure of refinance and purchase loan application activity, rose 0.5% from the prior week to 748.0, the Mortgage Bankers Association of America (MBA) reported. In the group's Weekly Mortgage Applications Survey a year ago, the index was at 1050.8.

The slight improvement was due to an increase in purchase application activity, reflected by the 6.8% jump to 463.5 in the Purchase Index, the Washington, D.C. trade association said.

The Refinance Index continued its downward path as it fell 5.8% from the prior week to 2403.0. The refinance share of total mortgage applications dropped to 44.0% from 47.3% one week earlier.

The average for the 30-year fixed rate mortgage came in at 6.01%, up 7 basis points (BPS) from last week, according to Freddie Mac's latest Primary Mortgage Market Survey. A year ago, it averaged 5.70%.

The 15-year average rose 10 BPS from last week to 5.35%, the government-sponsored enterprise reported.

Up six BPS from last week, Freddie said the 1-year Treasury-indexed adjustable-rate mortgage averaged 3.75%, while the MBA reported the ARM share of total application activity increased to 32.7% from 31.7% the previous week.

Freddie's said that after today's release of the Gross Domestic Product figures, the market began weighing which part, economic growth or inflation, is most dominant.

"Perhaps next week's Federal Reserve Board meeting and the release of April employment numbers will help the market find a balance between the two influences," Freddie's deputy chief economist Amy Cutts said in a written statement.

Bankrate.com, which surveys industry experts weekly, said rates seem to have reached their equilibrium for the next month and a half -- 57% of the panelists predicted rates will stay about the same (plus or minus 2 BPS), 29% believe rates will drop and only 14% say rates will rise.

Bankrate.com's senior financial analyst voted for an upturn noting that "more evidence of strong job growth will push rates higher, but at a more modest pace."

During late afternoon trading Thursday, the 10-year Treasury-note yield was up 5 BPS to 4.55%, and the price was down $0.40625 to 95 21/32.

Copyright: MortgageDaily.com


Contact ALTA at 202-296-3671 or communications@alta.org.

SoftPro is the nation's leading provider of real estate closing and title insurance software. With more than 14,000 customer sites and over 60,000 users nationwide, this award-winning software offers a suite of products designed to increase your volume and revenue by reducing the time it takes to do closings. SoftPro has been recognized by the American Business Awards every year since 2007 - winning awards for Superior Customer Service, Support and Product Development. North American Title Insurance Company (NATIC) is a seasoned title insurance underwriter, helping title agents to achieve their individual business goals for more than 50 years. Today, the company conducts real estate settlement services in 39 states and the District of Columbia through a network of experienced, independent agents.