With little other news to affect interest rates last week, lender appeared to be marking time while awaiting Friday's announcement of employment figures. Rates being offered by lenders surveyed by Freddie Mac slipped for the third week in a row, but the changes have been tiny.
Robert Van Order, chief economist at Freddie Mac, said the unemployment report could stimulate much greater activity this week.
"One of the things that affects interest rates is how strong people believe the economy is. The tendency is to look at employment growth. If it's strong, rates will go up," he said. "This has been a boring week and the one thing that seems relevant is the job figures."
He said 100,000 new jobs would be about normal. Anything much higher could push rates up a bit, and a lower number could push them down.
Perhaps the most significant rate development in recent weeks was that rates have fallen back almost to their 28-year lows, according to Keith Gumbinger, an analyst with HSH Associates, Butler, N.J. Some observers had speculated that last month's rise in rates may have marked the bottom.
Mr. Gumbinger is not expecting much reaction to the jobs report. "I think everything is anticipated at this point," he said. "The markets are just yawning along. Even the situations in Russia and Somalia haven't moved the markets much."
Warren Lasko, executive vice president of the Mortgage Bankers Association, believes the quiet market may be a symptom that the latest wave of refinancings may have run its course. "My own conviction is that by the end of the year, we'll see refis back in the 40% to 50% range and hold there for awhile."
More Refinancings
Refinancings have accounted for more than 60% of originations in recent months. But Mr. Lasko also believes refinancings will stay much higher than the average of about 25% of all loans before the present wave. He is looking to a longer-term range of 35% to 40%.
"I think we have largely exhausted that reservoir of stupendous savings from refis that has been driving the market," he said.
The Mortgage Bankers said originations were strongest last week in Federal Housing Administration and Veterans Administration mortgages. The number of loans in that sector of the market climbed by 93.5% over the level a year ago and only half the loans were for refinancing.
