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Industry Reports Show Mixed Results for Mortgage Rates

Two closely-watched industry studies that track weekly mortgage interest rates were sending mixed signals on Thursday. The good news for homebuyers and borrowers looking to refinance to lower their mortgage payments is that rates are still hovering near 50-year lows.
[IMAGE] ""Freddie Mac's study"":http://www.freddiemac.com/pmms/release.html?week=37&year=2010 shows that the 30-year fixed-rate mortgage (FRM) averaged 4.37 percent (0.7 point) for the week ending September 16. That's up from last week when it averaged 4.35 percent. It's the second straight week that the 30-year rate has risen in the GSE's survey.

The 15-year fixed-rate dipped slightly, falling from 3.83 percent last week, to 3.82 percent (0.6 point) this week.

Shorter-term rates also fell. Freddie reported that the 5-year adjustable-rate mortgage (ARM) edged down to 3.55 percent (0.6 point), while rates for 1-year ARMs dropped to an average of 3.40 percent (0.7 point).

Frank Nothaft, Freddie Mac's VP and chief economist, commented, ""Interest rates on 30-year fixed mortgages have remained below 5 percent for the last 19 weeks giving people ample opportunity to refinance their existing mortgage debt. As a result, homeowners reduced their financial obligations relative to disposable personal income during the second quarter of 2010 to the lowest share in almost eight years.""

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Nothaft says currently, four out of five mortgage applications are for refinancing existing mortgage debt.

A separate ""study by Bankrate"":http://www.bankrate.com/finance/mortgages/rates-fall-near-record-low.aspx found that mortgage rates across the board moved lower this week. Bankrate tracks data provided by the top 10 banks and thrifts in the top 10 U.S. markets.

The average conforming 30-year fixed mortgage rate retreated to 4.54 percent (0.37 point), according to Bankrate.com's weekly survey. That's down from 4.58 percent reported by the company last week.

The average 15-year fixed mortgage dropped to 4.00 percent (0.34 point), from 4.06 percent the week prior. This week's figure is a new record low for the 15-year rate in Bankrate's study.

Bankrate says the larger jumbo 30-year fixed rate also pulled back to a new low. It came in at 5.19 percent this week.

The company reports that adjustable-rate mortgages (ARMs) were down more significantly, with the average 5-year ARM sliding to 3.78 percent and the average 7-year ARM sinking to 4.04 percent.

Bankrate says the Federal Reserve's looming Open Market Committee meeting next Tuesday could add more volatility to mortgage rates.

""Although unlikely at the upcoming meeting, any additional bond purchases by the Fed would be designed to drive long-term interest rates - and mortgage rates â€" lower,"" the company said in its report. ""Recent economic reports have been a bit better than expected and remove the urgency for the Fed to take immediate action. Nonetheless, any hint of what the Fed is thinking about either the economy or the need for additional measures, could spark the next big move in mortgage rates.""

About Author: Carrie Bay

Carrie Bay is a freelance writer for DS News and its sister publication MReport. She served as online editor for DSNews.com from 2008 through 2011. Prior to joining DS News and the Five Star organization, she managed public relations, marketing, and media relations initiatives for several B2B companies in the financial services, technology, and telecommunications industries. She also wrote for retail and nonprofit organizations upon graduating from Texas A&M University with degrees in journalism and English.
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