Average rate for a 30 year mortgage drops to 4.39 percent
While the average interest rate for fixed-rate 30 year mortgages has dropped to 4.39 percent, it's unclear how rates will be affected when the Fed tapers their bond buying efforts.
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.
Writer, The PaperEconomy Blog
'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 7 basis points to 4.39% since last week while the purchase application volume increased 2% and the refinance application volume declined 2% over the same period.
Now that the Federal Reserve has actually announced a taper of their bond purchasing by $10 billion per month, it will be interesting to watch the trend for mortgage rates.
Any significant move up in lending rates has the potential to do serious damage to home purchase activity and home prices.
The following 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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