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| Refinances reduced even as rates relaxed after a 10-week rise.
The 30-year fixed-rate mortgage averaged 6.28%, down nine basis points from last week, according to Freddie Mac’s latest survey of 125 mortgage-lending companies, thrifts and commercial banks. Last year at this time the average was 5.72%. The average for the 15-year fixed rate also fell nine BPS to 5.81% this week, Freddie said. The spread between the 30-year and 15-year was 10 BPS wider a year ago. At Wednesday’s close, the 10-year Treasury note yielded 4.48% with a price of 100.06, slightly worse than 4.46% and of 100.25 at close almost a week earlier. “Lower oil prices — at least compared to the last several months — have helped to alleviate some of the inflation fears that the market has been experiencing lately” and helped “to reduce upward pressure on interest rates last week,” commented Frank Nothaft, Freddie chief economist, in a statement. November consumer confidence data due out next week “may well influence the direction of mortgage rates over the next few weeks,” he added. But the latest forecasts from Freddie’s and Fannie Mae indicate the 30-year will not repeat the climb seen in the past two and a half months — Fannie expects it to average 6.31% throughout 2006 and Freddie sees it at about that level through the first half and ending the year at 6.5%. The average for 5-year Treasury-indexed hybrid adjustable-rate mortgages came in at 5.75% — 11 BPS lower than a week ago, Freddie said. The 1-year Treasury-indexed ARMs averaged 5.14%, slipping six BPS in the past seven days. The 1-year Treasury bill yield was off one BPS from last week’s quote to 4.33% Monday, the Federal Reserve reported. Traffic slowed at mortgage shops as loan originators completed 3% fewer 1003s than in the previous week, with refinance requests sinking 7% and purchase-money application activity edging down 1%, according to the Mortgage Bankers Association’s latest application survey, which runs one-week behind Freddie’s. The refinance share of mortgage activity remained 40% and the ARM share continued at one-third. |
Coco Salazar is an assistant editor and staff writer for MortgageDaily.com. e-mail: [email protected]
