Mortgage rates jumped in response to the recent sharp sell-off resulting from perceived lower odds of further quantitative easing based on improving economic news.Freddie Mac reported 30-year fixed mortgage rates averaged 4.08%, a 16 basis points increase from last week. This is the highest level since late October. In addition, with an average 0.08-point, the no-point rate is near 4.30% and places 3.5% and some 4.0% coupons out of the refinancing window.
As a result, the Mortgage Bankers Association (MBA) is likely to report further declines in refinancing activity for the week ending March 23.
Yesterday, the MBA announced a 9.3% decline in the Refinance Index to 3604 for the week ending March 16 on further increases in rates. Since hitting a record low of 3.87% over the first three weeks of February with the Refinance Index reaching a year-to-date high of 4538, refinancing activity has plunged nearly 21%.
Of note, due to the lower refi activity, Home Affordable Refinance Program (HARP) applications will become a larger percent, as MBA Senior Vice President of Research and Education Jay Brinkmann pointed out in yesterday's press release.
In other lending programs, the 15-year fixed mortgage rates rose 14 basis points to 3.30%; 5/1 hybrid ARMs were up 13 basis points to 2.96%, while one-year ARM rates averaged 2.84% compared to 2.79% the previous week.
