Mortgage rates still trending downward

Mortgage and down paymentRates on the most popular types of mortgages moved downward according to HSH.com’s Weekly Mortgage Rates Radar. The average rate for conforming 30-year fixed-rate mortgages fell by 11 basis points (0.11 percent) to 4.46 percent. Conforming 5/1 Hybrid ARM rates decreased by four basis points, closing the Wednesday-to-Tuesday wraparound weekly survey at an average of 3.38 percent.

Mortgage rates move off recent rise

“With this week’s decline, fixed mortgage rates have trimmed off the very top of the recent rise,” said Keith Gumbinger, vice president of HSH.com. “With a full one percentage point rise between early May and early July, any declines are welcome, especially if they are of meaningful size, such as the one this week.”

Some potential borrowers are probably still catching their breath and adjusting their home buying plans because of the sharp spike in rates. This week’s decline isn’t enough to cause any mass rush back into the market for consumers who were on the fence, but for those actively in the home buying process, the dip is a chance to recapture some of the rise in costs the bump in rates fostered.

Gumbinger adds: “It’s not much, but for a borrower with a $ 200,000 loan, the difference in payment between last week and this week is about $ 13 per month. That’s about four “free” gallons of gas each month at present prices, so there is some value to be had.”

Big drop in HARP refinances

The decline in mortgage applications was much softer this week, reflecting the decline in mortgage rates.

According to the Mortgage Bankers Association, overall mortgage applications fell by just 1.2 percent during the week ending July 19. Purchase activity was down 2 percent last week, while refinance activity dropped 1 percent, remaining at its lowest point since July 2011.

While the refinance share of all mortgage activity remained at 63 percent of all applications, HARP activity dropped by 12 percent. However, conventional refinancing was up by 2 percent.

ARMs are back down to 7 percent of all applications.


HSH Associates Financial News Blog

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