Thursday, June 21, 2012

Mortgage Rates: Another Week, Another Record Low

by Calculated Risk on 6/21/2012 03:55:00 PM

Below is a graph comparing mortgage rates from the Freddie Mac Primary Mortgage Market Survey® (PMMS®) and the refinance index from the Mortgage Bankers Association (MBA).

The MBA reported yesterday that refinance activity increased again last week.

Earlier today from Freddie Mac: 30-Year Fixed-Rate Mortgage Averages 3.66 Percent

Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®), showing average mortgage rates easing amid worsening economic indicators. Both the 30-year fixed and the 5-year ARM registered new average record lows.

30-year fixed-rate mortgage (FRM) averaged 3.66 percent with an average 0.7 point for the week ending June 21, 2012, down from last week when it averaged 3.71 percent. Last year at this time, the 30-year FRM averaged 4.50 percent.
Mortgage rates and refinance activity Click on graph for larger image.

This graph shows the MBA's refinance index (monthly average) and the the 30 year fixed rate mortgage interest rate from the Freddie Mac Primary Mortgage Market Survey®.

The Freddie Mac survey started in 1971 and mortgage rates are currently at the record low for the last 40 years.

It usually takes around a 50 bps decline from the previous mortgage rate low to get a huge refinance boom - and rates are there! The 30 year conforming mortgage rates were at 4.23% in October 2010, so a 50 bps drop would be 3.73% - and rates hit 3.66% last week.

There was an increase this week in FHA streamlined refinances (due to lower premiums). And there has also been an increase in refinance activity from borrowers with negative equity and loans owned or guaranteed by Fannie or Freddie.

Earlier on Existing Home Sales:
Existing Home Sales in May: 4.55 million SAAR, 6.6 months of supply
Existing Home Sales: Inventory and NSA Sales GraphExisting Home Sales graphs