As the national housing market continues to exhibit positive developments in property prices, single-family home construction, and consumer financial safety and soundness, mortgage rates offer an additional source of optimism. For the third straight week, average rates were seen at lower levels, offering individuals considering homeownership more opportunities to lock in affordable home loans.
According to the latest Primary Mortgage Market Survey distributed by Freddie Mac, the week ending April 18 saw positive changes in both fixed- and adjustable-rate mortgages, with many moving down significantly from their previous positions recorded the preceding week.
Frank Nothaft, vice president and chief economist for Freddie Mac, said recent reports of lessened consumer confidence levels may have been seen as a small setback amid consecutive weeks of progress, however, the slight slip could have helped lead to lowered mortgage averages.
"Mortgage rates nudged lower this week as consumer spending showed signs of weakness," said Nothaft. "Retail sales contracted for the second time in three months, falling 0.4 percent in March. In addition, the University of Michigan reported their Consumer Sentiment Index dropped 6.3 points in April to settle at 72.3, its lowest level since July. The April reading snapped a streak of three consecutive gains."
Average 30-year FRMs were logged at 3.41 percent last week, moving down from the previous week's reading of 3.43 percent. The 15-year FRM products averaged 2.64 percent recently, showing a decline from the level of 2.65 percent observed the week prior. Five-year treasury-indexed hybrid ARMs exhibited a decline to 2.60 percent from the week before, when the product was seen averaging 2.62. Alternatively, one-year treasury-indexed hybrid ARMs actually increased, moving up to 2.63 percent from the level of 2.62 percent offered the preceding week.
Increasingly affordable mortgage rates see heightened application activity
As the average cost of home loans has seen positive decreases in recent weeks, the measure of mortgage loan application volume has logged related improvement. The Mortgage Bankers Association announced in its Weekly Mortgage Applications Survey for the week ending April 12 that activity was up 4.8 percent on a seasonally adjusted week-over-week basis.
The organization noted its Refinance Index rose 5 percent from the week before, appreciating to the highest level observed since the middle of January 2013 - although the refinance share of mortgage activity remained unchanged during the week, at 75 percent of total applications. In addition, the seasonally adjusted Purchase Index moved up to is best reading since May 2010 after hiking 5 percent from the previous week.