“I think they will continue to fall until about the last quarter; it depends on the economy and a lot of factors,” Don Ruter, a loan originator with American Mortgage and Equity Consultants, told Mortgage Professional America. “I think they originally rose prematurely, but I think the Fed is going to take a break.”
Originators will have to wait and see how long the record-low rate environment lasts. However, the latest data points to further drops to mortgage rates across the board.
According to the Mortgage Bankers Association’s latest weekly survey, the average rate for a 30-year fixed-rate conforming loan mortgage fell to 3.83% from 3.85% week-over-week for the week ending February 26.
The average 30-year fixed-rate mortgage for jumbo loans decreased to 3.75% from 3.8%.
Meanwhile, the average interest rate for FHA
-backed 30-year fixed-rate mortgages fell to 3.67% from 3.72%.
Finally, the 5/1 ARM rate decreased to 3.02% from 3.07%.
The only rate to see an increase over that weekly span was for the average 15-year fixed-rate mortgage, which increased to 3.13% from 3.12%.
Still, despite these dropping interest rates, applications were down week-over-week. Applications decreased 4.8%.
“On an unadjusted basis, the Index increased 7 percent compared with the previous week. The Refinance Index decreased 7 percent from the previous week, reaching its lowest levels since January 2016,” MBA said in a release. “The seasonally adjusted Purchase Index decreased 1 percent from one week earlier. The unadjusted Purchase Index increased 14 percent compared with the previous week and was 27 percent higher than the same week one year ago.”
Rates are on their way down but how long can originators expect the trend to continue?