Mortgage rates leveled off this week at or near their lows for the year after declining for eight consecutive weeks, Freddie Mac said in releasing the results of its latest Primary Mortgage Market Survey.
Low rates appear to have sparked interest in both refinancing and home purchases, according to a separate survey of loan applications conducted by the Mortgage Bankers Association.
Freddie Mac’s survey showed rates on 30-year fixed-rate mortgages, which last week hit a low for the year of 4.49 percent, averaging 4.5 percent with an average 0.7 point for the week ending June 16.
Rates on 30-year fixed-rate mortgages hit an all-time low in Freddie Mac records dating to 1971 of 4.17 percent during the week ending Nov. 11, 2010, before rebounding to their 2011 high of 5.05 percent in February.
Rates on 15-year fixed-rate mortgages averaged 3.67 percent with an average 0.7 point — a new 2011 low, but essentially unchanged from 3.68 percent last week.
Rates on 15-year mortgages hit an all-time low in records dating back to 1991 of 3.57 percent in November. At this time last year, 15-year loans were averaging 4.2 percent.
For 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) loans, rates averaged 3.27 percent with an average 0.6 point, down from 3.28 percent last week and 3.89 percent a year ago. That’s a new 2011 low, and not far off the all-time low in records dating to 2005 of 3.25 percent seen in November.
Rates on 1-year Treasury-indexed ARMs averaged 2.97 percent with an average 0.5 point, up from last week’s 2010 low of 2.95 percent. At this time last year, the 1-year ARM averaged 3.82 percent.
Looking back a week, a separate survey by the MBA showed demand for purchase loans was up a seasonally adjusted 4.5 percent during the week ending June 10 compared to a week earlier and 6.1 percent from a year ago.
Requests to refinance still accounted for 70 percent of applications, however, with refinance applications up 16.5 percent from the previous week. Demand for refinancings was still down 28 percent from November, when mortgage rates hit all-time lows.
Borrowers with an incentive to refinance remain constrained from doing so by lack of equity in their homes, said MBA chief economist Michael Fratantoni in a statement.
In a May 18 forecast, MBA economists said they expect rates on 30-year fixed-rate mortgages to rise to an average of 5.5 percent during the final three months of this year and average of 5.9 percent during the fourth quarter of 2012.