I've Fallen And I Can't Get Up, 30-year falls below 6%
September 27, 2002
By SAM GARCIA
mortgagedaily.com
In what has become rather redundant rhetoric, mortgage rates yet again fell to new record lows -- with the 30-year cracking six percent. Tired of reading what seems to be the same article over and over? Well, it appears you'll just have to learn to live with it (at least for the time being).
The benchmark 30-year fixed rate mortgage fell six basis points (BPS) from last week to 5.99% -- the lowest its been since at least 1971. Freddie Mac reported the average in this week's survey of thrifts, commercial banks and mortgage lending companies.
"The possibility that consumer spending will slow, given the current weakening level of consumer confidence, created an uneasy atmosphere in the financial markets," said Freddie's chief economist, Frank Nothaft. "Combined with the growing possibility of a war with Iraq, new money flowed into the bond market, driving down yields and other interest rates."
The average 15-year fixed rate mortgage also fell six BPS to 5.41% -- it lowest level since at least 1991, when Freddie began tracking it.
New applications maintained their near-record pace, rising 4.8% from last week, according the survey of mortgage bankers, commercial banks and thrifts by the Mortgage Bankers Association of America (MBA). Application levels are within five percent of all-time highs reach earlier this month. Fueling the increase were refinance applications, which MBA said rose more than six percent. Refinances represented nearly 75% of total applications.
Adjustable rate mortgage (ARM) loans represented 11.3% of all applications, down from 12.5% last week. Even though the average one-year ARM is at its lowest point in eight years -- Freddie reported it at 4.22% -- ARM activity has continued to decline as borrowers flock to secure the lowest fixed rates in decades.
Stocks fell Friday, weighed down by data underscoring the weakness of the economy as well as more concern about corporate earnings from Philip Morris and General Electric, according to the Wall Street Journal. As investors retreat to the safety of Treasuries, Lioninc.com reported that the 10-year note was trading up 12/32 near midday to yield 3.72%. Last week, the midday yield was reported at 3.80%. |
