The mortgage rates finally declined after four weeks on an uptrend, prompting many people to borrow money. But still, the rates were approximately eighth of a percentage point higher during the time when a lot of people committed to buying new real properties.
Investors ditched the government bonds worldwide resulting into the reversal of the profit made by mortgage rates. The incident caused the yield on the 10-year Treasury to increase. The 10-year Treasury is followed by the mortgage rates.
Chief operating officer for Northern Mortgage Service in Grand Rapids, Michigan, Pava Leyrer says “(Mortgage rates) are better than they have been. We saw them bump up before the holidays. Now, they are improving.”
Borrowers start filing in
The Mortgage Bankers Association said that the number of borrowers searching for a possible mortgage increased by 1 percent last week. Annually, the purchase applications for mortgage increased by 14 percent. The general volume of applications decreased by 1.6 percent as a result of the decline of refinances by 4 percent, which was caused by the rate window closing for some borrowers.
The Commerce Department said that during April, new home sales soared from 6.8 percent to an annual rate of 517,000. On the other hand, the median price rose by 8.3 percent to $297,300 from a year ago. Leyrey says, “There are not many refinances left, a few here and there, but only for very specific reasons. We are getting quite a lot of new inquiries for new construction and new homes from all over, from Florida to Michigan.”
Mortgage rates update for the week
The Bankrate.com, in a national survey of large lenders, said that the benchmark fixed-rate mortgage for 30 years dropped from 4.03 percent to 4 percent last week. The rate was 4.26 percent last year while four weeks ago, the rate was 3.86 percent. The surveyed mortgages for this week had an average total of 0.23 discount and origination points. For the past 52 weeks, the 30-year fixed-rate mortgage had an average of 4.07 percent. For this week, the rate is 0.07 percent lower compared to the 52-week average.
Other updates include: the fall of benchmark 15-year fixed-rate mortgage from 3.23 percent to 3.22 percent, the fall of benchmark 5/1 adjustable-rate mortgage from 3.19 percent to 3.17 percent, and the fall of benchmark 30-year fixed-rate jumbo from 4.13 percent to 4.07 percent.