Fixed mortgage rates sit at the lowest point since Freddie Mac began tracking them. But trading in Treasuries suggests fixed rates may head higher.
In its Primary Mortgage Market Survey for the week ending April 30, the secondary lender said the 30-year average was 4.78%, 2 basis points lower than the prior week. The average came in at 6.06% a year ago.
The only other time the 30-year was this low was the week ending April 2, and “It has never been recorded lower in Freddie Mac’s survey, which goes back to 1970.”
The average 15-year fixed-rate mortgage was unchanged for the third consecutive week at 4.48%. The 15-year is at its lowest point since Freddie began tracking it in August 1991.
Fixed mortgage rates moved lower despite an increase in the 10-year Treasury yield to 3.121% near midday from 2.955% a week earlier.
Freddie reported that the five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 4.80%, 5 BPS lower than last week.
The one-year Treasury-indexed ARM averaged 4.77% in Freddie’s survey, 5 BPSÂ lower than seven days earlier. The underlying index, the yield on the one-year Treasury note, was 0.50% yesterday, 2 BPS lower than the prior Wednesday.
The six-month London Interbank Offered Rate fell to 1.58% yesterday from 1.65% the prior week, Bankrate.com reported. LIBORÂ is a broadly used index on subprime ARMs.
Just 2.1% of loan shoppers elected to go with an ARM in the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending April 24. ARMÂ share rose from 1.4% a week earlier.
MBA reported that overall applications fell 18% on a seasonally adjusted basis, bringing the Market Composite Index down to 960.6. MBA’s data trails Freddie’s mortgage rate data by one week.
Refinance applications fell 22%, and the refinance share of total 1003s fell to 75% from the previous week’s 80%, the trade group said.
In its quarterly refinance report released today, Freddie said cashout activity fell to a five-year low; just 42% of first-quarter refinances saw the balance increase by at least 5 percent. In the fourth quarter, the cashout share was a revised 55%. The figures are based on a sample of loans where Freddie funded two successive mortgages.
Freddie economist Amy Crews Cutts noted in the report that the $32 billion in home equity extracted during the past six months was the lowest of any two-quarter period since 2001.
Purchase applications eased 1% in MBA’s survey, but government activity edged 1% higher.
Freddie’s Chief Economist Frank Nothaft said the bottom of the housing market may be near. Existing home sales are holding up, the inventory of unsold homes has declined and home-price deterioration is easing.
