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| Despite five consecutive weeks of falling long-term rates, applications improved little. But a surprise announcement from the U.S. Treasury Department had rate watchers on edge.
Slipping three basis points from last week to the lowest level in over two months, the average for the 30-year fixed-rate mortgage came in at 5.75%, according to Freddie Mac’s latest weekly survey of 125 mortgage lending thrifts, commercial banks and companies released today. At this time last year, the average was 37 BPS higher. In the Southeast, the 30-year averaged lowest at 5.66%, while it was highest in the North Central region at 5.82%, the survey reportedly showed. The 15-year averaged 5.31%, Freddie said, edging down two BPS during the past week. Freddie’s chief economist Frank Nothaft commented that “with some economic indicators showing signs that the economy is experiencing a soft spot at the moment, low mortgage rates will ensure that housing activity will continue to flourish throughout the spring buying season.” None of the 100 mortgage “experts” surveyed this week at Bankrate.com thought rates would increase over the next 35 to 45 days, 57% of the panel predicted they’d remain about the same, and the rest thought they’d drop even more. But, the stack of mortgage applications was almost unchanged from the previous week as requests for both refinances and purchase money loans barely improved, according to the Mortgage Bankers Association’s latest Weekly Mortgage Applications Survey, which runs one week behind Freddie’s data. The share of refinance applications was mostly unchanged from 39%. The 5-year Treasury-indexed hybrid adjustable-rate mortgage reportedly fell the most — down four BPS within the past seven days to 5.16%. Freddie said the 1-year Treasury-indexed ARM did not follow suit, as it rose 1 BPS to 4.22% this week. The ARM share reportedly fell slightly to one-third. In late afternoon trading Thursday, the 10-year Treasury note yielded 4.17% — much lower than the 4.37% yield a week ago. The price was 98.63, up from 97.06 last week. The 10-year Treasury note experienced a 5 BPS rise early Wednesday after the Treasury Department confirmed market speculation that it is considering reinstituting the 30-year bond, which has not been issued since October 2001 “when the government was projecting surpluses that would eventually eliminate government debt,” MarketWatch reported. Although, the department won’t announce its decision until Aug. 3, the statement that its is considering such a move sparked concerns about excess supply and boosted the 30-year note yield to 4.62% from 4.5% late Tuesday, and pushed down its price 2 27/32 to 110 24/32, MarketWatch said. |
Coco Salazar is an assistant editor and staff writer for MortgageDaily.com. email: [email protected]
