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15-year Under 4%

For the first time on record, the 15-year fixed rate slipped below 4 percent. Still, prospective borrowers don’t seem very interested.

Freddie Mac reported in its Primary Mortgage Market Survey that the average 15-year fixed-rate mortgage was 3.95 percent, a record low based on data going back to 1991 — when tracking of the 15-year mortgage began. The 15-year was 4.00 percent a week ago.

Down 5 basis points, the average 30-year fixed-rate mortgage was a record 4.49 percent in Freddie’s survey. Tracking of the 30-year began in 1971. The 30-year was 5.22 percent 12 months earlier.

The conventional 30-year rate came in at 4.414 percent in the Mortgage Market Index report for the week ended Wednesday, lower than 4.485 percent last week. The jumbo 30-year was 5.320 percent, falling from 5.420 percent. As a result, the jumbo-conventional spread narrowed to 91 BPS from last week’s 94 BPS.

“Annual revisions cut
the cumulative GDP growth in half over the past three years ending in the first quarter of 2010 from 1.4 percent to 0.6 percent,” Freddie’s chief economist, Frank Nothaft, explained in this week’s report. “This reduces inflationary pressures and allows longer-term rates room to ease.”

The yield on the 10-year Treasury bond, closed today at 2.94 percent based on data from the U.S. Department of the Treasury. The movement from 3.03 percent a week earlier offers little indication of where mortgage rates might land next week.

There will be no changes in mortgage rates, according to 61 percent of panelists for the week Aug. 5 to Aug. 11. But more than a quarter expected at least a 3-basis-point increase over the next week or so, and 11 percent forecasted a decline.

The five-year Treasury-indexed adjustable-rate mortgage was a record 3.63 percent in Freddie’s survey, 13 BPS better than last week.

With a 9-basis-point weekly decline, Freddie reported the one-year Treasury-indexed ARM averaged 3.55 percent this week and 4.78 percent a year earlier.

The yield on the one-year Treasury bill finished today at 0.27 percent, lower than 0.30 percent last Thursday, the Treasury reported. The six-month LIBOR yield fell to 0.65 percent from 0.69 percent, said.

ARM share declined to 5.4 percent in the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ended July 30 from 5.7 percent in the prior report.

Mortgage activity was virtually unchanged this week, with the Mortgage Market Index edging up to 313 from 310 seven days prior. The index reflects mortgage broker activity.

MBA’s report, which reflects mortgage banker activity from last week, indicated applications increased just 1 percent on a seasonally adjusted basis from a week earlier.

The average loan amount in the Mortgage Market Index report increased to $216,033 from $214,257, while Washington, D.C.’s, $286,888 was higher than any state and South Dakota’s $146,065 was lower.

The report indicated that the total refinance share was 60 percent, higher than 59 percent in the week ended July 28. This week’s share reflected a rate-term share of 45 percent and a cashout share of 15 percent.

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