Interest rates at record low levels is a trend that is likely to continue given the Federal Reserve Board's announcement on Tuesday it will buy government debt. But low rates haven't been resulting in a rush of new mortgage applications recently as this week's Mortgage Bankers Association Market Composite Index found.
For the period ended Aug. 6, the Index increased a scant 0.6% on a seasonally adjusted basis and 0.4% on an unadjusted basis when compared with the previous week.
There was a 0.3% increase in the seasonally adjusted purchase index, making it four weeks in a row of increases in this category. The unadjusted Purchase Index decreased 0.3% compared with the previous week and is 34.1% lower than the same week one year ago.
The Refinance Index increased 0.6% from the previous week, while the share of refinance applications increased 10 basis points from one week prior to 78.1%. The adjustable-rate mortgage share of activity increased to 5.9% from 5.4% over the same time frame.
The average contract interest rate for the 30-year fixed-rate mortgage has decreased by three basis points to 4.57% from 4.60% for the preceding week. The previous record was set the week ended July 16 at 4.59%. Points decreased to 0.89 from 0.93 (including the origination fee) for loans with an 80% percent loan-to-value ratio, the association reported.
Setting a new record low for the third out of the last four weeks, the average contract interest rate for 15-year FRMs fell by 7 bps during the week to 3.95% from 4.03%, with points increasing to 1.08 from 1.01.
The average contract interest rate for one-year ARMs fell 10 bps to 7.00%.
