Average 30-year fixed rate edges back above 5%; applications fall

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The average rate on a 30-year fixed home loan edged back above 5% last week -- and down went mortgage applications.

That’s the word in a Mortgage Bankers Assn. survey released today, which said applications for purchase loans slipped 5% from the previous week. Applications for refinance loans, which have made up about two-thirds of the total recently, were essentially flat, falling by 0.1%. Overall decline: 1.8%

The trade group’s statistics assume a 20% down payment -- a lofty amount for many people.

But for borrowers who could hurdle that barrier, the average 30-year fixed rate increased during the week from 4.89% to 5.02%, with upfront points paid to lenders (including the origination fee) decreasing from 1.13% of the loan balance to 1.11%, the trade association said.

The average 15-year rate rose from a record low of 4.32% to 4.44% with points unchanged at 1.04% of the loan amount.

Rates for the 30-year slipped below 5% in the middle of last month, the Mortgage Bankers Assn. said, triggering a mini-boom in applications. The trade group said this week that it expects rates to average 5% this quarter but climb back to 5.6% sometime late next year.

Some mortgage pros say 30-year rates beginning with a ‘4’ are a magic trigger for borrowers. What do you think?

--E. Scott Reckard