Homeowners and potential first-time buyers couldn't be tempted by record-low mortgage rates last week, according to the ""Mortech Inc."":http://mortech.com/ and ""_Mortgage Daily's_"":http://www.mortgagedaily.com/ _U.S. Mortgage Market Index_.[IMAGE]
The weekly index was down 4 percent for the week ending October 5, with adjustable rates showing the largest decline at 10 percent. According to Mortgage Daily, business on adjustable-rate mortgages (ARMs) has dropped 63 percent over the past year.
ARM business represented a 2.4 percent share of all mortgage activity for the week, according to the index. That was down from 2.6 percent in the previous report and 4.9 percent around the same time in 2011.
New refinance business also fell, dropping to 76.4 percent of total business from 77 percent a week before. Refinancing is still strong compared to last year, though, showing a year-over-year increase of nearly 6 percentage points.
Inquiries for ""FHA-insured"":http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/fhahistory mortgages dropped around 4 percent, with FHA business making up a 9.8 percent share of business-down a few hundredths of a percent from the previous index. The national FHA share was around 9.4 percent at the same time last year.
The recent index stands in stark contrast to the previous week's, which reported all-around weekly growth in originations on the back of the Federal Reserve's involvement with mortgage-backed securities (MBS). The ""Mortgage Bankers Association"":http://www.mortgagebankers.org/default.htm reported a 16.6 increase in mortgage application volume, with the organization's Refinance Index hitting its highest level since 2009.
With the Fed planning to purchase MBS until sustainable economic growth is achieved, it's unlikely that mortgage rates will spike back up in the near future. However, a ""report"":https://themreport.com/articles/unemployment-slips-below-8-for-first-time-since-2009-2012-10-05 from the Bureau of Labor Statistics showing employment growth may cause a short-term bump.
For now, experts are predicting that rates have more or less found their bottom. In a survey conducted by ""Bankrate"":http://www.bankrate.com/, 58 percent of respondents said they expect mortgage rates to remain stable for the week ending October 11.