Mortgage rates continue falling
The average rate for a 30-year fixed rate mortgage dropped to 3.98% since last week.
The Mortgage Bankers Association (MBA) publishes the results of a weekly applications survey that covers roughly 50 percent of all residential mortgage originations and tracks the average interest rate for 30 year and 15 year fixed rate mortgages as well as the volume of both purchase and refinance applications.
The purchase application index has been highlighted as a particularly important data series as it very broadly captures the demand side of residential real estate for both new and existing home purchases.
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'SoldAtTheTop' is not a pessimist by nature but a true skeptic and realist who prefers solid and sustained evidence of fundamental economic recovery to 'Goldilocks,' 'Green Shoots,' 'Mustard Seeds,' and wholesale speculation.
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The latest data is showing that the average rate for a 30 year fixed rate mortgage (from FHA and conforming GSE data) declined 5 basis points to 3.98% since last week while the purchase application volume surged 10.3% and the refinance application jumped a whopping 26.40% over the same period.
With rates trending ever lower, the economy seemingly near recession and the FOMC members becoming more dovish by the day, it will be interesting to see how far rates on the long end can decline. All things being equal, falling home prices, declining purchase applications and record low long lending rates all appear to indicate a deflationary for the macro-economy.
The above chart shows the average interest rate for 30 year and 15 year fixed rate mortgages since 2006 as well as the purchase, refinance and composite loan volumes (click for larger dynamic full-screen version).
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