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| Application activity and rates jumped — although rates are expected to rise at a slower pace than previously anticipated.
Reversing a two-week decline, the average 30-year fixed-rate mortgage climbed 6 basis points from last week to 6.32%, according to Freddie Mac’s Primary Mortgage Market Survey. Freddie chief economist Frank Nothaft noted that the 30-year this year has averaged just about the same as it has for the last two years but said mortgage rates will rise in the new year. The Mortgage Bankers Association’s revised forecast has the 30-year rising 10 BPS each quarter from its 6.2% average expected this quarter, and reaching 6.7% by year-end 2006 — about six months later than the group predicted lasted month. Accordingly, half of 100 mortgage “experts” surveyed this week by Bankrate.com believe rates will remain relatively unchanged over the next 35 to 45 days. The remaining half was evenly split among those who expect them to increase and those who think they’ll fall. The average 15-year fixed rate also rose 6 BPS to 5.87% this week, Freddie said. A year ago, when the 30-year was 5.71%, the reported spread between the 30-year and 15-year was 12 BPS wider. Late Thursday, the 10-year Treasury note yielded 4.46% with a price of 100.28, better than 4.52% and 99.81 a week ago. Edging up 2 BPS from a week earlier, the average for 5-year Treasury-indexed hybrid adjustable-rate mortgages reportedly came in at 5.78%. The 1-year Treasury-indexed ARM average remained at 5.16%. The 1-year T-bill itself was 4.35% Wednesday, the Federal Reserve said. ARMs reportedly continue to comprise one-third of mortgage applications, MBA reported. Originators apparently spent more time in the office as 1003 activity improved 5% during the past week, reversing a three-consecutive-week decline, according to the MBA’s latest survey of mortgage bankers, commercial banks and thrifts, which runs one week behind Freddie’s. The improvement reflected a 7% climb in refinance requests and 4% increase in purchase money application activity. The refinance share of total applications increased to 41% from 39% in the previous week, MBA said. |
Coco Salazar is an assistant editor and staff writer for MortgageDaily.com. e-mail: [email protected]
