Mortgage Daily

Published On: February 9, 2012

While the 30-year mortgage retained its record-low standing this week, it could be higher in next week’s report. Meanwhile, pricing on 15-year loans and jumbo mortgages was less competitive this week relative to the conforming 30-year mortgage.

After falling to the lowest level on record, the 30-year fixed-rate mortgage maintained its record status this week.

Freddie Mac reported in its Primary Mortgage Market Survey for the week ended Feb. 9 that the 30 year averaged 3.87 percent, the same as the record reached in the prior report. The 30 year was lower than 5.05 percent during the same week a year ago.

An analysis of Treasury market activity this week points to an increase in rates by next week’s report. The yield on the 10-year Treasury note, which is tracked by mortgage rates, averaged 1.98 percent during the period that Freddie surveyed its lenders this week, according to data reported by the Department of the Treasury. The 10-year yield closed at 2.04 percent today, pointing to an upcoming 6-basis-point or so increase.

But only 36 percent of panelists surveyed by for the week Feb. 9 to Feb. 15 agreed that rates will move up. An overwhelming majority, 64 percent, predicted that rates will remain within 2 BPS of their current level and none forecasted a decline.

Borrowers who inquired about jumbo loans were quoted rates that were 62 BPS higher than on conforming mortgages, according to the U.S. Mortgage Market Index report from Mortech Inc. and Mortgage Daily for the seven days ended Feb. 3. The jumbo premium worsened from 60 BPS in the prior report.

The 15-year fixed-rate mortgage averaged 3.16 percent in Freddie’s report, 2 basis points worse than in the previous report. This week, 15-year loans were priced 71 BPS below 30-year mortgages, not as good as the 73-basis-point spread a week earlier.

Up 3 BPS from last week, Freddie reported the five-year, Treasury-indexed, hybrid, adjustable-rate mortgage at 2.83 percent.

A 2-basis-point increase from last week was recorded for the one-year Treasury-indexed ARM, which Freddie said was 2.78 percent this week. The one-year ARM was 3.35 percent a year ago.

The upward movement with the 15 year and ARM products was the result of a strong employment report for January, according to Freddie’s chief economist, Frank Nothaft. He noted that the job gain — 266,000 — was the biggest increase since April 2011.

The index that is used to determine rate adjustments on one-year ARMs, the yield on the one-year Treasury note, climbed to 0.15 percent today from 0.14 percent last Friday, Treasury Department data indicate.

The London Interbank Offered Rate, or LIBOR, eased to 0.77 percent Wednesday from 0.78 percent the prior week, reported.

Of all borrowers who inquired about a mortgage, 4.31 percent inquired about an ARM in the latest Mortgage Market Index report. ARM share fell from 4.49 percent a week earlier.

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