Mortgage rates crept higher for the second week in a row and, while still historically attractive, will likely have some adverse impact on mortgage application activity.
This was already evident in yesterday's report from the Mortgage Bankers Association for the week ending March 25 with both refinancing and purchase activity slipping a respective 10.1% and 1.7% as rates increased.
For the week ending March 31, Freddie Mac reported both 30- and 15-year fixed mortgage rates rose five basis points to 4.86% and 4.09%.
On the adjustable side, one-year ARM rates also gained five basis points to 3.26%, while 5/1 hybrid ARMs rose eight basis points to 3.70%.
For March, the 30-year fixed mortgage rates averaged 4.84%, down 11 basis points from February's average. This has led to higher refinance activity over the month by 16% on average through last week.
Despite the increase in refinance activity, prepayments at this time are expected to decline nearly 10% in April, activity for which will be reported in May. Meanwhile, May prepayments are expected to be 5% higher with day count being the primary influence on speeds.
