Good Chance for New MTA Record

Rates

Mortgage Daily Staff

                                                 January 3, 2013

A decline in the Monthly Treasury Average has occurred each of the past six months, while the index has not increased in eight months. MTA has a good shot at establishing a new record low in September.

An analysis of Treasury market data indicates that the index, which used to determine changes to interest rates and payments on some adjustable-rate mortgages, was 0.14917 percent in August.

MTA was down from 0.15333 percent both a month earlier and a year earlier.

The index has not increased since December 2012, when it was 0.17500 percent, and has fallen each month since February of this year, when it was calculated at 0.17750 percent.

MTA is calculated based on a 12-month daily average for the yield on the one-year Treasury note. 

The daily average for the one-year Treasury was 0.13 percent during August, according to data provided by the Department of the Treasury.

The lowest level on record for the index was in May 2012, when it came in at 0.14667 percent.

Unless the daily average for September exceeds 0.17 percent, the MTA will see another decline in the next report.

In fact, if September’s daily average is 0.14 percent or less — the existing MTA record will be broken.

The one-year Treasury yield, which itself is a much more widely used ARM index, increased to 0.13 percent at the end of August from 0.11 percent as of July 31.

The Treasury Department data indicated that the one-year yield closed at 0.14 percent Monday.

In the week ended Aug. 30, ARMs accounted for 9.9 percent of all pricing inquiries tracked in the Mortgage Market Index report, slipping from 10.7 percent in the prior report.

Mortgage Daily Staff

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