Mortgage reports moved closer to their high points for the year this week, buoyed by continued reports of a strengthening economy.
The average interest rate on a 30-year, fixed-rate loan was 4.57 percent, up from 4.51 percent last week and 3.55 percent in the same week a year ago, Freddie Mac said Thursday in its weekly survey.
The average rate on a 15-year, fixed-rate loan was 3.59 percent. That compared with 3.54 percent last week and 2.86 percent a year ago.
Among the positive economic reports credited for pushing rates higher were those of real gross domestic product and the ninth consecutive monthly increase in residential construction spending.
The run-up in rates has dampened interest in refinacing existing mortgages but when there is a slight decline in rate, homeowners are moving on them.
For instance, last week, applications to refinance existing mortgages rose 2 percent from the previous week, bringing the refinance share of applications to 61 percent, the Mortgage Bankers Association reported Wednesday. According to its own survey of mortgage rates, the average contract rate for a home loan fell to 4.73 percent, from 4.80 percent a week earlier.
Home purchase mortgage applications decreased 0.4 percent from a week earlier.
Longer term, though, the general trend of rising rates is affecting activity. In March, the average rate on a 30-year, fixed-rate loan was 3.57 percent, according to the Federal Housing Finance Agency. By June, it was 4.07 percent, the highest rate for that popular mortgage product since September 2011.
As a result, refinancing of mortgages backed by Fannie Mae and Freddie Mac fell during the second quarter. Almost 1.3 million mortgages were refinanced in the three months that ended in June, compared with 1.4 million in the year’s first quarter. However, that first-quarter number was hard to beat, as it was the highest volume for Fannie- and Freddie-backed mortgage refinancings in at least three years.
Of that second-quarter volume, 22 percent were refinancings connected to the government’s Home Affordable Refinance Program, designed to assist owners who owe more on their mortgage than the home is worth.
“Refinance activity could easily fall to a 15-year low in 2014,” Lawrence Yun, chief economist at the National Association of Realtors, wrote in a blog post.
Original article here.
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