Mortgage Commentary

According to latest data from Mortgage Bankers Association:
Total mortgage application volume reduced by 0.7% last week.
Applications for mortgages to buy homes fell 2.2%, but refinancing rose
1.2%. Refinancing accounted for 43.7% of total applications last week,
up from the prior week's 42.4%.

The yield on a 10-year Treasury note, the primary reference for longer
-term mortgage rates, stood near 4.17% on Thursday, down from a
4-month high of 4.4% hit in early August.

According to Freddie Mac, the average rate paid on a 30-year fixed loan
was 5.77% this week, down from last week's 5.8% and last year's 5.82%.
The average rate on a 15-year fixed-rate loan was 5.35% this week,
down from last week's 5.4%. The loan averaged 5.21% exactly a year ago.

ARMs (Adjustable Rate Morgage) remain near their highest since 2002
and are likely to climb higher, with the Federal Reserve seen raising its
3.5% borrowing target at least twice more, and possibly three more times,
in 2005. One-year Treasury-indexed ARMs averaged 4.56%, down
slightly from last week when it averaged 4.58%. At this time last year, the
one-year ARM averaged 4.05 percent. Five-year Treasury-indexed
hybrid ARMs averaged 5.3%, down from last week when it averaged 5.34%.

The 30-year loan required the payment of an average 0.5 point [A point
equals 1% of the loan amount, charged as prepaid interest]. The 15-year
fixed and five-year hybrid required 0.6 point, and the one-year ARM
required 0.7 point.