This week, Freddie Mac [1], The Mortgage Bankers Association [2](MBA), and the Federal Housing Finance Agency [3] (FHFA) released reports on the state of the mortgage rates. According to Freddie Mac, mortgage rates are still in a decline. The 30-year fixed mortgage rate fell nine basis points this week, another week-over-week decline. But despite the fluctuations in rates, new home sales still managed to exceed expectations jumping 6.1 percent in February to 592,000. Additionally, 15-year fixed-rate mortgages averaged 3.39 percent, down from the previous week’s 3.44 percent, while adjustable-rate mortgages fell from 3.24 percent to 3.18 percent.
As rates decline, the MBA reports that applications saw a slight decrease this week. The MBA’s Market Composite Index, a measure of mortgage loan application volume, dropped 0.8 percent from last week. The refinance share of mortgage activity dropped to 44 percent of total applications, marking the lowest level of refinance activity since October 2008.
Though rates have declined week-over-week, February’s rates were still higher than January’s. The national average contract mortgage rate for the purchase of previously occupied homes by combined lenders index according to the FHFA was 4.27 percent for loans closed in late February, up 5 basis points from 4.22 percent in January, while the average interest rate on all mortgage loans was 4.25 percent, up 8 basis points from 4.17 in January.
According to the FHFA, interest rates grew month-over-month as well, by 8 basis points from January to February. The average interest rate on conventional, 30-year fixed-rate mortgages of $424,100 or less was 4.41 percent, 4 basis points above the 4.37 percent in January.
Though FHFA data showed an increase in interest rates month-over-month, MBA’s weekly data reveals that interest rates have dropped on a weekly basis. This week, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances decreased from 4.46 percent to 4.33 percent.