It’s been six years to the day since the one-year adjustable-rate mortgage has been this low, though the news wasn’t so good this week for the jumbo spread. The return of a bull market in the stock exchanges today has placed upward pressure on mortgage rates, and purchase activity is at its lowest point since the 90s.
The average 30-year fixed-rate mortgage was 4.78% in Freddie Mac’s Primary Mortgage Market Survey for the week ended today. The 30-year fell from 4.84% the previous week and 4.91% during the same week last year, and it hasn’t been this low in more than five months.
Freddie credited instability in financial markets overseas for the improvement in home-loan rates.
Freddie’s regulator, the Federal Housing Finance Agency, reported that the average 30-year fixed-rate at Freddie and Fannie Mae was 5.12% in April, up 0.03% from March.
In the Mortech-MortgageDaily.com Mortgage Market Index for the week ended May 26, the conventional 30-year fixed-rate fell to 4.747% from last week’s 4.875%. The 30-year jumbo rate, meanwhile, moved 7 basis points lower to 5.600%. The resulting conforming-jumbo spread widened to 85 BPS from last week’s 80 BPS.
The yield on the 10-year Treasury, which is tracked by mortgage rates, was 3.33% during trading today, according to WSJ.com. The 10-year yield closed at 3.36% last Thursday based on data from the U.S. Department of the Treasury. Given that the 30-year declined 6 BPS this week, rates are likely up around 3 BPS today.
The 10-year note price was down 1 5/32 from yesterday as investors increased their appetites for stocks — pushing the Dow Jones Industrial Average more than 200 points higher in afternoon trading.
Little direction can be determined from Bankrate.com’s survey of panelists for the week May 27 to June 2 about where rates are headed; 46% predicted no change, 38% forecasted an increased of at least 3 BPS and just 16% expected rates to fall during the next week.
Freddie reported the average 15-year fixed-rate mortgage at 4.21%, 3 BPS better than seven days prior. The conventional 15-year was 4.14% in the Mortgage Market Index report, 7 BPSÂ better. FHFA said the 15-year moved to 4.52% last month from March’s 4.57%.
The five-year Treasury-indexed ARM rose, however, to 3.97% in Freddie’s report from the previous week’s 3.91%.
The one-year Treasury ARM slipped to 3.95% from 4.00% on a weekly basis in Freddie’s survey. The one-year was 4.69% a year ago and hasn’t been this low since since May 27, 2004 — when it stood at 3.87%. The one-year Treasury yield, which is the index for the one-year ARM, inched up 2 BPS from a week earlier to 0.37% yesterday, the Treasury reported.
The six-month London Interbank Offered Rate shot up 10 BPS during the prior seven days to 0.76% as of May 26, Bankrate.com reported.
ARMs represented 6.0 percent of loan applications in the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ended May 21, lower than 6.3% the previous week. The decline reflected last week’s 7-basis-point narrowing of the spread between the one-year ARM and the 30-year fixed-rate mortgage.
Mortgage activity increased 7 percent this week based on the Mortgage Market Index, which was 270. The average U.S. mortgage increased to $220,893 from $215,751. The highest average was Washington, D.C.’s, $314,057, and the lowest average was Ohio’s $162,653.
In MBA’s report, applications increased 11% on a seasonally adjusted basis last week from a week earlier, in line with last week’s overall decline in mortgage rates. Refinances were up 17%, but purchase activity slipped 3% to a 13-year low.
Refinance share this week jumped to 52% in the Mortech-MortgageDaily.com report from 44% the prior week. The latest share reflected a 39% rate-term share and a 13% cashout share.
Last week, refinance share rose to 72% from 68% a week earlier, according to MBA’s latest report.
