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Mortgage Rates Set New Lows as Economy Tilts Here, There

A decline in interest by homebuyers shaved just 0.2 percent off mortgage applications last week, with interest rates for home loans down to new, record lows.

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The ""Mortgage Bankers Association"":http://www.mbaa.org/default.htm, which unveils the figures in a weekly survey, found application volume upward-bound by 24 percent on a seasonally unadjusted basis.

Refinance applications started to swell last week. The Refinance Index went up 1 percent, with the refinance share of mortgage activity cresting at 81 percent of total applications, up from 80 percent last week.

Those mortgage applications filed to take advantage of the Home Affordable Refinance Program meandered to 22 percent of volume last week.

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Purchases shot up or down with the same unwieldiness as application volume. The seasonally adjusted Purchase Index declined 4 percent from the week before but climbed 18 percent on a seasonally unadjusted basis.

The trade group recorded mostly declines across the board for mortgage interest rates, with the average contract interest rate for a 30-year fixed-rate mortgage with balances less than $417,500 down to 3.72 percent ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô the lowest in the history of its survey.

Interest rates for 30-year home loans with jumbo loan balances more than $417,500 fell to 3.99 percent, while those for the 15-year loan achieved another record-setting low by dipping to 3.03 percent.

Rates for 30-year mortgages backed by the Federal Housing Administration stayed the same at 3.50 percent from last week.

Interest rates remain volatile as divisions increase among many economists, with some, such as ""Fannie Mae"":http://www.fanniemae.com/portal/index.html Chief Economist ""Doug Duncan"":http://www.fanniemae.com/portal/about-us/company-overview/leadership/duncan.html, projecting that growth could slow over the fall. Many others point to the ongoing debt crisis in Europe.

The Fed's stimulus measures received jittery and mixed reactions last week, with the central bank pledging to keep interest rates at close to zero percent through 2015, even while it resumed quantitative easing for the nation's currency.

*Where do you think the world economy will take mortgage rates next?* Rattle off an email to editor@themreport.com for a chance to appear in our monthly magazine.

About Author: Ryan Schuette

Ryan Schuette is a journalist, cartoonist, and social entrepreneur with several years of experience in real-estate news, international reporting, and business management. He currently lives in the Washington, D.C., area, where he freelances for DS News and MReport.
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