By Mike Colpitts
Lower rates paid to investors for U.S. Treasury bonds drove mortgage rates and home loan applications lower for the week, according to the 
Mortgage Bankers Association. The rate on a fixed 30-year mortgage fell to as low as 3.69% among Housing Predictor affiliated lenders.
Rates on the 15-year fixed rate loan also took an appreciable drop from last week. Average national mortgage rates are expected to be lower released Thursday by Freddie Mac.
However, the volume of home refinancing activity slowed 2.2% from the prior week as homeowners hesitated to lock-in rates following three previous weeks of record all-time lows, according to the bankers’ survey. The Market Composite Index, a combination of refinances and new home loan purchase applications fell a slight 0.3% for the period.
“Mortgage rates remained near survey lows last week, but refinance volume fell slightly,” said Michael Fratantoni, Vice President of Research and Economics at the Mortgage Bankers Association.
“More than 20% of refinance applications were for HARP loans. The HARP share of total refinance applications has increased over the past month. Purchase application volume increased over the week, but remains within the narrow and anemic range of activity we have seen since the expiration of the homebuyer tax credit in May 2010.”
The refinance share of mortgage activity declined to 77.9% of applications from 80.1% the prior week. It’s the lowest the refinance share has been since last December. The adjustable-rate mortgage (ARM) share of activity dropped to make up just 5.0% of applications.
Among home purchase applications in January, 86.4% were for fixed rate 30-year loans, while 6.5% were for 15-year mortgages and only 5.4% for ARMs. But homeowners refinancing mortgages continue to move into shorter term 15-year loans in greater numbers as the volume of owners apparently wanting to pay-off their homes grows.