|
|
| Mortgage rates improved this week and may continue to fall. New loan applications also were better.
The average 30-year fixed-rate mortgage came in at 6.03%, according to Freddie Mac’s Primary Mortgage Market Survey for the week ending March 6. The 30-year tumbled from 6.24% a week earlier and was also lower than 6.14% a year earlier. Freddie Chief Economist Frank Nothaft explained, “Weak economic reports that indicated declines in the job market, slowing in manufacturing and low consumer confidence drove bond yields lower this week and mortgage rates followed.” In its economic outlook released earlier this week, the government-sponsored enterprise projected the 30-year average will drop to 5.5% for the first quarter, then slowly climb to 6.0 percent by the end of next year. The 15-year fixed-rate averaged 5.47% this week, falling from 5.72% the prior week, Freddie’s survey indicated. The benchmark 10-year Treasury yield closed at 3.62% today, according to U.S. Treasury Department data, dropping from 3.71% last Thursday and suggesting rates may ease further. Just over half of the panelists surveyed by Bankrate.com this week expect mortgage rates to rise over the next 35 to 45 days, while 28% forecast no change. Freddie reported the average 5-year Treasury-indexed hybrid adjustable-rate mortgage fell 9 basis points from last week to 5.34%. The 1-year Treasury-indexed ARM tumbled 17 BPS to 4.94% this week, Freddie’s survey said. The 1-year Treasury itself yielded 1.59 percent today, off from 1.92% last Thursday. Another ARM index, the 6-month London Interbank Offered Rate yielded 2.88% this week, Bankrate.com reported. A week earlier, the LIBOR yield was 3.06%. ARMs accounted for 17% of total applications tracked by the Mortgage Bankers Association for the week ending Feb. 29. ARM share was up from 15% a week earlier. MBA said that while purchase applications increased just 1% from the prior week, a 5% increase in refinance applications pushed overall activity 3% higher. The share of total applications that were for a refinance was mostly unchanged at 52%. In its forecast, Freddie said residential loan originations will increase to $0.5 billion this quarter from $0.4 billion during the fourth quarter. Production will climb to $0.6 billion in the second quarter then fall to $0.5 billion by the fourth quarter. |
|
|
Â
|
|
|
Sam Garcia worked in mortgage lending for twenty years prior to becoming publisher of MortgageDaily.com. e-mail:Â mtgsam@aol.com |
