Mortgage rates declined further this week with the 30-year fixed mortgage rate back to its lowest level since mid-December.
Still, rates are 22 basis points above their record low of 4.71% in the first week of that month. For the week ending Feb. 18, 30-year fixed rates averaged 4.93% compared to 4.97% last week, Freddie Mac reported.
Despite rates under 5%, mortgage application activity was not very responsive in the week ending February 12th with the Mortgage Bankers Association's (MBA) Refinance Index slipping over 1% to 2860, while the Purchase Index declined 4% to 212.
While a further reduction in rates is favorable, both refinancing and purchase activity response is expected to be muted. As spring approaches, the Purchase Index should become more responsive as borrowers take advantage of the homebuyers tax credit before it expires at the end of April.
Freddie Mac also reported a one basis point dip in 15-year fixed rates to 4.33%, while 5/1 hybrid ARMs fell seven basis points to 4.12% and one-year ARMs dropped 10 basis points to 4.23%.