Mortgage rates sinking to their lowest
In addition, the cost of a 60% LTV two-year fixed rate is only 1% than at the beginning of the year.
Mortgage applications fell even as mortgage rates dropped to the lowest level since November, the Mortgage Bankers Association reported.
The 15-year fixed-rate average dropped to 3.23 percent with an average 0.5 point.
The average interest rate on 30-year, fixed-rate conforming mortgages, the most widely held type of US home loan, decreased to 4.23 percent, the lowest level since the week of November 18. Average contract interest rates for 5/1 ARMs decreased to 3.27% from 3.33%, while points for 80% LTV loans increased to 0.26 from 0.27.
"Weak economic data and growing global tensions are driving investors out of riskier sectors and into Treasury securities", Sean Becketti, Freddie Mac chief economist, said in a statement.
In its April Economic and Housing Outlook, Fannie Mae says, "Recent declines in mortgage rates may motivate some home buyers to enter the market before rates pick up". The adjustable-rate mortgage (ARM) share of activity decreased to 8.4% of all applications.
Because of uncertainty surrounding the French elections and tensions in North Korea, investors are scooping up bonds. Rates on a 30-year FHA-backed fixed-rate loan fell from 4.14% to 4.09%. It's incredible that a modest rise in mortgage rates can lead to a collapse in refi's but that also tells you that there aren't many homes left to refi at these historically low rates. This compared with the preceding week's 4.08 percent, it said.
The Refinance index increased 0.2% over the same period, while the seasonally adjusted and unadjusted Purchase indices decreased by 3%. The refinance index was essentially unchanged, slipping 0.2 percent.