Applications for purchase mortgages jumped last week to the highest level of the year as the job market improved and mortgage rates remained below 5 percent, the Mortgage Bankers Association said in releasing the results of its latest Weekly Mortgage Applications Survey.
A separate survey by Freddie Mac showed mortgage rates were largely unchanged this week, with rates on 30-year fixed-rate loans below 5 percent for the third week in a row.
Freddie Mac’s survey showed 30-year fixed-rate mortgages averaged 4.88 percent with an average 0.7 point this week, up slightly from 4.87 percent last week but down from the 5.05 percent average during the week ending Feb. 10, a high for the year to date.
Last year at this time, 30-year fixed-rate mortgages averaged 4.95 percent. The all-time low in Freddie Mac records dating to 1971 was 4.17 percent during the week ending Nov. 11.
Rates on 15-year fixed-rate mortgages averaged 4.15 percent this week with an average 0.7 point, unchanged from last week and down from 4.32 percent a year ago. The 15-year fixed-rate loan hit a low in records dating back to 1991 of 3.57 percent in November.
Freddie Mac said 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) loans averaged 3.73 percent this week, with an average 0.6 point, up from 3.72 percent last week but down from 4.05 percent a year ago. The 5-year ARM hit a low in records dating to 2005 of 3.25 percent in November.
Rates on 1-year Treasury-indexed ARMs averaged 3.21 percent with an average 0.5 point, down from 3.23 percent last week and 4.22 percent a year ago.
Looking back a week, the MBA’s Weekly Mortgage Applications Survey showed demand for purchase loans was up a seasonally adjusted 12.5 percent during the week ending March 4 compared to the week before.
Demand for refinancings jumped even more dramatically — refi requests were up 17.2 percent from the week before — and accounted for 65.5 percent of all mortgage applications.
On an unadjusted basis, demand for purchase loans was at its highest level since May, but still down 14.3 percent from the same time a year ago, the MBA said.
In a Feb. 18 forecast, MBA economists projected rates on 30-year fixed-rate loans would average 5.2 percent during the first quarter of 2011, rising to an average of 5.5 percent in the second quarter, 5.6 percent in the third quarter, and 5.8 percent in the final three months of the year.
The MBA projects rates on 30-year fixed-rate loans will rise steadily next year, to an average of 6.3 percent in the final three months of 2012.