Mortgage rates finally improved this week after inching up the past couple weeks, Freddie Mac reported today.
The 30-year fixed averaged 5.16 during the week ending February 12, down from 5.25 percent the prior week and 5.72 percent a year earlier.
“Interest rates for 30-year fixed-rate mortgages are almost 1.5 percentage points below 2008’s peak set on July 24, 2008, offering many homeowners an incentive to refinance,” said Freddie Mac chief economist Frank Nothaft, in a statement.
“This would translate into a monthly payment savings of around $188 on a $200,000 mortgage.”
The 15-year fixed also improved, dropping to 4.81 percent from 4.92 percent a week ago and 5.25 last year.
The five-year adjustable-rate mortgage fell three basis points to 5.23 percent, while the one-year ARM averaged 4.94 percent, up two basis points from last week.
“The Bureau of Economic Analysis estimated that the weighted average mortgage rate of loans outstanding was about 6.2 percent in the fourth quarter of 2008,” Nothaft added.
“As a result, the share of refinancing among the total number of conventional mortgage applications has exceeded 50 percent for the past 11 weeks and averaged 80 percent over this period, according to the Mortgage Bankers Association.”
These rates are good for conforming loan amounts at a loan-to-value of 80 percent; jumbo loans continue to price much higher, though they too have fallen in recent weeks.
Wells Fargo is offering a jumbo 30-year fixed at 6.625 percent, which is markedly lower than the near-eight percent rate seen last month.
However, many present and prospective homeowners seem to be waiting on the sidelines in anticipation of government tinkering that will lower interest rates well below market.
That would explain the precipitous drop in loan application volume last week, according to the latest Mortgage Bankers’ report.
(photo: sidelong)
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