Fixed mortgage rates fell to the lowest level on record. But don't expect them to stay there.
In Freddie Mac's survey of 125 thrifts, credit unions, commercial banks and mortgage lenders for the week ended today, the average 30-year fixed-rate mortgage was 4.78%, falling from 4.83% six days earlier. The 30-year was 5.97% one year earlier.
The 30-year matched the record 4.78% set on April 30, Freddie noted.
The average 15-year fixed-rate mortgage declined 3 basis points from the record set last week to 4.29%. The new record is based on Freddie's data going back to 1991.
It was the fourth consecutive week of declines for fixed rates, Freddie' Chief Economist Frank Nothaft said in the statement.
A benchmark for mortgage rates, the yield on the 10-year Treasury bond, was 3.342% today, according to WSJ.com. Seven days ago, the 10-year yield closed at 3.36%, U.S. Department of the Treasury data indicate -- suggesting rates might turn higher next week.
The 100 panelists surveyed by Bankrate.com for the week Nov. 25 to Dec. 3 overwhelmingly agreed rates will rise -- with 80 predicting at least a 3 basis point increase over the next 35 to 45 days. The rest were evenly split over whether rates will fall or stagnate.
The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 4.18% in Freddie's survey, falling from 4.25% last week.
But the one-year Treasury-indexed ARM was unchanged at 4.35% -- though still its lowest level since July 7, 2005, when it stood at 4.33%. The one-year ARM averaged 5.18% during this week in 2008.
The index used on the one-year ARM, the yield on the one-year Treasury bill, closed at 0.28% yesterday, lower than 0.32% the prior week, the Treasury reported. Another ARM index, the six-month London Interbank Offered Rate, fell to 0.49% yesterday from 0.51% the previous week.
ARMs accounted for 5.3% of applications tracked in the Mortgage Bankers Association's Weekly Mortgage Applications Survey for the week ended Nov. 20, up from 5.1% the prior week.
MBA said overall applications fell 5% on a seasonally adjusted basis from the prior week. The drop was the result of a 10% decline in refinance applications, which represented 72% percent of all applications -- down from three-quarters the week before.
Purchase applications rose 5% from MBA's previous survey.