It’s been a rather interesting week as far as long term interest rates were concerned. According to Freddie Mac’s Survey reports on Primary Market, the interest rates, which had gone up in the previous week, have fallen flat as the week ended. According to the survey, fixed-rate-mortgage (FMR), for 30 year span, averaged a percentage of 5.67 with points 0.4 for the current week. This report revealed that the points have dropped by one, from the previous week reports. FMR, for 15 year span, averaged a percentage of 5.15, with points of 0.4. In the previous week, the statistics were 5.17 percent with 0.4 points. 

Treasury- indexed Adjustable Rate Mortgage (AMR), for a span of 5 years, showed more dramatic results, with the average dropping to 5.21 percent from a percentage of 5.32 in the previous week. The points and fees, however, remained constant at 0.4. 

Treasury- indexed AMR, with 1 year span, dropped from 5.05 percent to 5.03 percent. This drop was not that appreciable though the points and fees declined by 0.5 from 0.7. 

According to Frank Nothaft, the chief economist and Vice- President of Freddie Mac, the mortgage rates, in conjunction with the Treasury bond yields, did not undergo much change in the current week. Moreover, the economic news released in the previous week, pointed out that the economy still remains weak. 

Non-farm employment fell by a count of 17,000 jobs in December, the first loss since August 2003. The non-manufacturing transaction or business index quotient of the Institute of Supply Management decreased last month. The index has dropped for the first time since March 2003 and has touched the lowest level since 2001, October. The opinion survey of all senior loan officers of Federal Reserve, carried out in the month of January, indicated that the lending standards in the field of residential mortgages will be further tightened up within the next 3 months. 53 percent indicated tightening up of credit, as opposed to 41 percent, in the survey carried out in October. 70 percent opine a decrease in the quality of credit, in the next year. 

The weekly survey carried out by the Association of Mortgage Bankers, ended on February 8, indicating a sharper adjustment in the interest rates. Interest rates for FRMs, spanning for 30 years, increased to 5.72 from 5.61 percent. Origination fee escalated to 1.15 from 0.98. 

Interest rates for FRMs of 15 years, increased to 5.18 percent and 1.08 points, from 5.09 percent and 0.92 points. 

Points for 1 year ARMs decreased to 0.90 from 0.97, with the average rate increasing by 10 points to a percentage of 5.72. 

Mortgage origination was still higher as compared to the 2007 levels, though its value dropped a bit as compared to the previous week. Market Composite Index dipped 2.1 percent on an adjustment basis and 0.4 unadjusted. The volume however, increased by 65 percent compared to the same week of last year. 

Refinancing decreased to 67.4 percent from a percentage of 69.2 in the previous week. ARM market shares rose to 9.9 from 8.8 percent.