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| Rising rates have not dampened purchase mortgage activity, but they have pushed variable-rate activity higher.
The average 30-year fixed-rate mortgage was 6.53%, according to Freddie Mac’s latest weekly survey of thrifts, commercial banks and mortgage lending companies. The average climbed from 6.42% last week but was 2 basis points lower than a year earlier. The 30-year averaged the lowest in the West at 6.51%, according to the report. The 15-year fixed rate averaged 6.22% in the latest survey, climbing 10 BPS from the prior week, Freddie reported. The increase in mortgage rates was attributed to a strong employment report, Freddie Chief Economist Frank Nothaft said in the survey — though the numbers worsened for the mortgage sector. The 10-year Treasury yield, a benchmark for fixed mortgage rates, was up 11 BPS early today to 5.07%. The 10-year yielded 4.90% last week and had been as low as 4.63% last month. The majority of mortgage bankers, mortgage brokers and others in the industry surveyed by Bankrate.com this week see rates heading higher. Adjustable-rate mortgages saw a smaller rate increase, with the 5-year Treasury-indexed hybrid average increasing just 5 BPS for the week to 6.24%, according to Freddie. The 1-year Treasury-indexed ARM was up 8 BPS to 5.65%, while Federal Reserve data indicate the 1-year index itself was 4.99% Tuesday — 3 BPS higher than a week earlier. The improvement in adjustable rates compared to fixed rates helped the ARM share of loan applications nudge higher to 18%, the Mortgage Bankers Association reported in its latest Weekly Mortgage Applications Survey. Even after adjusting for the Memorial day holiday, MBA said applications dipped 2% from a week earlier. Refinances fell 6% while purchases rose 2%. Conventional and government applications were both down. |
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