Rates Soar

The 30-year fixed-rate mortgage averaged 5.79%, jumping 10 basis points within the past seven days, according to Freddie Mac’s latest Primary Mortgage Market Survey.

Up 11 BPS from last week, the 15-year came in at 5.33%, Freddie reported.

The largest hike reportedly occurred in the average for the 5-year Treasury-indexed hybrid adjustable-rate mortgage, which at 5.17% shot up 12 BPS from the previous week.

The only decrease was in the 1-year Treasury-indexed ARM average, Freddie said, which nudged down 2 BPS to 4.14%.

“Concern that long-term interest rates are too low and comments from Fed officials this week helped push mortgage rates higher this week,” said Freddie chief economist Frank Nothaft in a written statement. “We’ve been expecting this for some time, so the rise in rates for the third consecutive week doesn’t really come as a surprise to the market.”

And they’ll keep trending upward according to Fannie Mae’s latest mortgage market forecast, which has the 30-year averaging 5.91% next quarter.

None of the 100 industry brokers, bankers and individuals surveyed by Bankrate.com foresee rates falling over the next 30 to 45 days — 87% predict an increase and the remaining 13% think they’ll be unchanged.

The 10-year Treasury-note closed Thursday at a price of 96.94 with a yield of 4.38%. A week ago, the price was reported at 97.66 and the yield was 4.28%.

The rate hikes drove down mortgage applications by 2% for the week ending Feb. 25, which pushed the Market Composite Index down to 710.1, according to the Mortgage Bankers Association’s latest survey of mortgage bankers, commercial banks and thrifts. Last year at this time — when the 30-year average was at 5.59% — the measure of applications stood at 878.7.

A 10% downturn in refinance requests offset a 5% increase in purchase application activity.

The refi share of applications fell about 5% from the previous week to 45%, MBA reported, while the ARM share remained at 31%.