Despite a decline in the underlying rate, the Monthly Treasury Average moved higher last month. Also recently higher was the share of prospective borrowers who are opting for adjustable-rate mortgages.
MTA was 0.17500 percent in December, according to an analysis of Federal Reserve Board data. The index, which is used to regulate payment and interest rate changes on some adjustable-rate mortgages, rose from 0.17167 percent a month earlier.
In December 2011, MTA was 0.18167 percent.
The index is calculated based on the average yield on the one-year Treasury note for each of the past 12 months. The one-year yield averaged 0.16 percent in December, down from 0.18 percent in November.
The one-year Treasury yield, itself, also serves as an ARM index. The one-year yield fell to 0.16 percent at the end of December from 0.18 percent at the end of the prior month, according to Department of the Treasury data. The one-year yield closed Friday at 0.15 percent.
ARMs accounted for 2.95 percent of all rate locks reflected in the U.S. Mortgage Market Index from Optimal Blue and Mortgage Daily for the week ended Jan. 4. ARM share climbed from 2.49 percent the prior week.
