Mortgage rates mostly didn’t budge this week as the lending industry continues to adjust to new disclosure forms implemented less than three weeks ago.
n The benchmark 30-year fixed-rate mortgage remained unchanged at 3.93 percent, according to the Bankrate.com national survey of large lenders. One year ago, that rate was 4.01 percentage. Four weeks ago, it was 4.06 percentage. The mortgages in this week’s survey had an average total of 0.2 discount and origination points. Over the past 52 weeks, the 30-year fixed has averaged 3.99 percentage. This week’s rate is 0.06 percentage points lower than that 52-week average.
n The benchmark 15-year fixed-rate mortgage fell to 3.11 percent from 3.14 percent.
n The benchmark 5/1 adjustable-rate mortgage remained at 3.18 percent.
n The benchmark 30-year fixed-rate jumbo fell to 3.87 percent from 3.88 percent.
“Rates are stable on the lower side,” says Pava Leyrer, chief operating officer of Northern Mortgage Services in Grand Rapids, Mich. “And I think those lenders who were prepared for these disclosure form changes and explained it to real estate agents and buyers are now seeing a larger uptick in business because a lot of people are nervous about what’s going on. No one wants to risk a delay.”
Mortgage volume rebounds
The level of mortgage applications recovered from a steep decline two weeks ago. Mortgage applications jumped 11.8 percentage last week from the previous week, according to the Mortgage Bankers Association. Purchase applications rose 16 percentage while refinances were up 9 percentage.
The trade group expects mortgage application volume to be choppy in the next few weeks as mortgage brokers and loan officers adapt to new disclosure forms that went into effect Oct. 3 and were mandated by the Dodd-Frank Act.
“What is going to be interesting is a month from now when the closings start,” says John Stearns, a senior mortgage banker for American Fidelity Mortgage in Milwaukee. He also notes that his transition to the new forms has so far been smooth. “If there are any problems at all, they’d be at the end of the process, not the beginning,” he says.
Stearns notes that business has slowed some, but he still is getting a good mix of purchases and refinances.
Across the country, the number of new single-family homes that broke ground in September was up percentage 0.3, while the number of permits for single-family units was down by the same percentage, according to the Commerce Department. Overall, housing starts increased an unexpected 6.5 percentage because of a surge in apartment building.
Still, homebuilders feel confident in the housing market. A sentiment index from the National Association of Home Builders hit a reading of 64, the highest level since late 2005. Any reading above 50 signals that builders see sales conditions as positive rather than negative.