As mortgage rates continued descending to levels not seen for more than two years, mortgage hunters, especially those seeking to refinance, raided originator shops. But variable rate loans continued to lose their appeal.
Tumbling 14 basis points from last week to the lowest level since late September 2005, the 30-year fixed-rate mortgage average came in at 5.96%, according to Freddie Mac's Primary Mortgage Market Survey for the week ending today. A year ago, the 30-year stood at 6.11%.
And the 30-year this quarter is expected to average anywhere from 6.20% to 6.40% -- with latter being the highest estimate for the next quarter as well, though it could be as low as 6.29%, according to the latest forecasts of Freddie, Fannie Mae, the National Association of Realtors and Mortgage Bankers Association.
The 15-year averaged 5.65%, down 8 BPS from a week ago, Freddie said.
In addition to annual house prices growing at the slowest pace in almost 13 years, "with lower consumer spending and personal income gains in October, interest rates on U.S. Treasury securities fell lower this week and mortgage rates followed," Freddie said in an announcement.
But the 10-year Treasury yield, at 4.00% this afternoon, was up 6 BPS for the day and worse than 3.91% a week ago.
Over the next month and a half, rates are expected to fall, according to half of the panelists surveyed by Bankrate.com this week. More than 40% forecast an upturn and only 9% predicted they'd stay relatively unchanged.
The 5-year Treasury-indexed hybrid adjustable-rate mortgage average plunged 11 BPS to 5.75% this week, Freddie's data indicated.
Up 3 BPS to 5.46% was the 1-year Treasury-indexed ARM average, Freddie said. But the 1-year Treasury yield itself sank 18 BPS in a week's period to 3.13% Wednesday, Federal Reserve data showed.
Another competing index for ARMs, the 6-month London Interbank Offered Rate, rose 5 BPS to 4.91% for the week ending Wednesday, Bankrate.com reported.
The share of ARMS fell to below 12% from nearly 15%, according to MBA's Weekly Mortgage Applications Survey for the week ending Nov. 30.
But overall mortgage application activity jumped 23% from the prior week, on a seasonally-adjusted basis, thanks to a 32% boost in refinance requests and 15% upturn in purchase money demand, MBA said. The volume of applications for government-insured loans improved 28 percent from the prior week, while for conventional loans rose 22 percent.
Accordingly, the share of refinance applications increased to 56% from about 51% a week earlier, MBA reported.