30 Year Mortgage Jumps 73 Basis Points in 5 Weeks
FreddieMac's weekly mortgage rate survey posted the current average 30 year fixed rate mortgage at 5.94%. This was a significant increase of 27 basis points over the prior week's level of 5.67%. The rate has now risen 73 points in 5 weeks. This movement upwards will result in a further decline in refinance activity.
The MBA survey on mortgage application activity reported a decline in loan applications filed:
* The Purchase Index fell 1.1% from 447 to 442
* The Refinance Index fell 7.2% from 6657 to 6181
MBA's latest mortgage forecast (as of 07/14/03) for 2003 through 2005 support our conclusions:
1. Rates will rise!
2. Mortgage originations will decline! - Overall, they project a decline of 46% in 2004 and a decline of 30% in 2005.
3. Refinance activity will plunge! - A drop of 66% in 2004, followed by another drop of 65% in 2005.
MBA Forecast Highlights
30-Year Fixed Rate
2003 5.70%
2004 5.90%
2005 6.50%
I think their predictions are gonna come a bit early. Like today