The 30-year fixed mortgage rates held steady at 4.50% for the week ending June 23, according to Freddie Mac's weekly report. However, points increased to a 0.8 average from 0.7 previously. As a result, the no-point rate increased slightly to 4.70% from 4.68%.
Despite historically attractive levels, borrowers remain sensitive to mortgage rate levels as yesterday's mortgage application activity report from the Mortgage Bankers Association (MBA) proved. The MBA reported the Refinance Index declined 7.2% to 2676 on a slight increase in mortgage rates.
Scott Buchta, a managing director at Sandler O’Neill & Partners, pointed out that mortgage rates have been in a fairly tight range for a month now, which mean that eligible borrowers have likely responded to this opportunity.
Meanwhile, mortgage rates remain too high to bring in the 4.5% coupon. MBS analysts said that mortgage rates need to move closer to 4% to stimulate refinance activity to the 4000 to 5000 area seen in late summer/early fall of last year.
Freddie Mac also reported a two-basis-point increase in 15-year fixed and one-year ARM rates to 3.69% and 2.99%, respectively. The 5/1 hybrid ARMs eased two basis points to 3.25% - its lowest level for the year and matching its record low.