Loan Apps Fall

The average 30-year fixed-rate mortgage was 6.09% in Freddie Mac’s survey of 125 thrifts, commercial banks and mortgage lending companies for the week ending June 5. The 30-year was 0.01% higher than a week earlier but 44 basis points lower than a year earlier.

The average 15-year fixed-rate edged down to 5.65% from 5.66 the prior week, Freddie reported.

Freddie’s Chief Economist Frank Nothaft explained that reports of continued inflation held fixed-rates steady.

Fixed mortgage rates tend to move with the 10-year Treasury yield, which was 4.01% today according to CNNMoney. Last week, the 1-year yielded 4.11%.

Rates will increase more than 2 BPS during the next 35 to 45 days, according to 46 of the 100 panelists surveyed by Bankrate.com for the week June 5 to June 11. The rest were evenly split over whether rates would fall or remain unchanged.

Freddie said the 5-year hybrid Treasury-indexed adjustable-rate mortgage averaged 5.51% this week, falling from 5.62% a seven days earlier.

The average 1-year Treasury-indexed ARM was 5.06%, declining from 5.22% the prior week, according to Freddie’s survey. The 1-year Treasury yield itself was 2.14% yesterday, down from 2.21% the previous week.

Another ARM index, the 6-month London Interbank Offered Rate, was 2.90% as of June 4, rising from 2.85% the prior week.

ARMs accounted for 9% of the loan applications tracked by the Mortgage Bankers Association for the week ending May 30, fractionally off from the prior week.

MBA reported loan applications fell 15% from a week earlier, bringing the seasonally adjusted Market Composite Index to 502.3. A 26% decline in refinance applications dragged down overall activity, though purchase activity fell 5%. The proportion of total applications that were for refinances was 41%, down from 46% the previous week.

Sam Garcia worked in mortgage lending for twenty years prior to becoming publisher of MortgageDaily.com.

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