Rising rates and a holiday week really put a dent in mortgage activity.
On Thursday, mortgage giant Freddie Mac reported in its Primary Mortgage Market Survey for the week ended today that the average 30-year fixed-rate mortgage rose 3 basis points from last week’s record low to 4.35 percent. But the 30-year still remains below 5.07 reported for the same time last year.
In the Mortech-Mortgage Daily Mortgage Market Index report for the week ended Wednesday, the jumbo 30-year mortgage increased 4 BPSÂ from last week to 5.24 percent. The conventional 30-year was also 4 BPS higher — leaving the jumbo-conventional spread at 91 BPS.
Mortgage rates are likely to continue higher in next week’s reports based on movement in the 10-year yield. According to U.S. Department of the Treasury data, the 10-year yield climbed to 2.77 percent today from 2.63 percent last Thursday.
However, no change was predicted by half of the panelists surveyed by Bankrate.com for the week Sept. 9 to Sept. 15. But a third forecasted that rates will increase at least 3 BPS over the next week, while 17 percent projected that rates will fall.
The average 15-year fixed-rate mortgage was unchanged from last week’s record-low 3.83 percent, Freddie said.
The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.56 percent this week in Freddie’s survey, 2 BPS higher than last week.
The best performance was turned in by the one-year Treasury-indexed ARM — which fell 4 BPS this week to 3.46 percent. The one-year averaged 4.64 percent a year earlier. But the underlying one-year Treasury yield inched up 0.01 percent from a week ago to 0.26 percent today, Treasury data indicated.
The yield on the six-month London Interbank Offered Rate, an index for many outstanding subprime ARMs, closed at 0.49 percent yesterday, a tad below 0.50 percent a week prior, according to Bankrate.com.
The Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ended Sept. 3 indicated that ARMs accounted for 6.1 percent of overall applications, the same as last week.
Mortgage activity tumbled this week, with the Mortgage Market Index falling to 259 from 344 seven days earlier.
The average loan amount in the report fell to $210,537 from $214,263. The highest average was Washington, D.C.’s, $285,575, while Nebraska’s $148,970 average was the lowest.
Feeding the weekly decline in activity were refinances, which accounted for 60 percent of activity this week compared to 64 percent last week, the Mortech-Mortgage Daily report indicated. This week’s rate-term share was 46 percent, and the cashout share was 14 percent.
