Mortgage rates remain at historically low levels

Fixed mortgage rates remain at or near historical lows after yet another week of decreasing interest rates, according to the Mortgage Bankers Association (MBA).
The results of the MBA’s most recent Weekly Mortgage Applications Survey revealed that the average contract interest rate for 15-year fixed-rate mortgages (FRMs) fell to 3.46 percent for the week ending September 16, 2011, down from 3.52 percent the previous week.
The average contract interest rate for 30-year FRMs with conforming loan balances ($417,500 or less) came in at 4.29 percent, the exact same average recorded the prior week.
Average interest rates for both 30-year fixed jumbo mortgages and 30-year FRMs backed by the Federal Housing Authority (FHA), however, both decreased in this latest survey, the MBA said.
Average rates for 30-year FRMs with jumbo loan balances fell to 4.55 percent from 4.57 percent the previous week, while 30-year FRMs backed by the FHA declined slightly to 4.07 percent from 4.08 percent one week prior.

Mortgage applications rise, refinancing increases

Total mortgage application rose slightly week-over-week, the MBA said, and more homeowners looked to refinance existing mortgages.
Mortgage applications increased 0.6 percent from the previous week, while the share of application activity attributed to refinancing rose to 78.3 percent of total applications, up from 76.8 percent the week before.

Rates for ARMs fall, too

Average rated for adjustable-rate mortgages (ARMs) fell this week, as well. According to the MBA, 5-year ARMs averaged 2.96 percent in this latest survey after averaging 2.99 percent in the previous week.
Despite this fall in average rates for ARMs, however, fewer applicants opted for these types of loans. The share of application activity tied to ARMs declined to 6.7 percent of total applications, down from 7.3 percent one week earlier.
See also: ARM vs. fixed rate mortgage calculator