As the 30-year fixed rate jumped to a six-month high, the spread between the 15-year and the 30-year reached its widest level in more than a year. Refinance activity tumbled, while purchase applications increased.
The average 30-year fixed-rate mortgage was 5.29% in Freddie Mac’s Primary Mortgage Market Survey for the week ended today. The 30-year was 4.91% last week, while it stood at 6.09% a year ago.
The 30-year is at its highest level since the week ended Dec. 11, 2008 — when it was 5.47%.
At 4.79%, the average 15-year fixed mortgage was 26 basis points higher than last week, Freddie said.
The spread between the 30-year and the 15-year increased to 50 BPS — the widest since March 27, 2008 when it stood at 51 BPS.
The yield on the 10-year Treasury was 3.667% near midday, worsening from 3.637% a week prior and supporting the increase in fixed mortgage rates.
Bankrate.com said 42% of the panelists it surveyed for the week June 4 to June 10 predicted an increase of at least 3 BPS during the next 35 to 45 days. One-third forecasted a decline and one-quarter saw no changes ahead.
The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 4.85%, edging up from 4.82% a week earlier, according to Freddie’s survey.
Freddie reported that the one-year ARM averaged 4.81%, higher than 4.69% seven days prior. The yield on the underlying one-year Treasury bill was 0.45% yesterday, lower than 0.49% a week ago, data from the U.S. Department of the Treasury indicated.
The six-month London Interbank Offered Rate edged up to 1.23% yesterday from the prior week’s 1.22%, Bankrate.com reported. LIBORÂ is a popular subprime ARM index.
The Mortgage Bankers Association said ARM share was 3.0% in its Weekly Mortgage Applications Survey for the week ending May 29, climbing from the previous week’s 2.6%.
A nearly one-quarter decline in refinance applications pushed MBA’s Market Composite Index down 16% on a seasonally adjusted basis from seven days earlier to 658.7. The refinance share dropped to 62% from 69% in MBA’s prior survey.
Purchase applications increased 4%, however, MBA reported.
