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| There were fewer mortgage hunters in the market despite declining rates — which aren’t expected to continue the downward trend.
Edging down three basis points from last week, the 30-year fixed-rate mortgage came in at 5.62%, according to Freddie Mac’s latest Primary Mortgage Market Survey. Last year at this time, it was two-thirds of a percentage point higher. The average for the 15-year nudged down only one BPS to 5.20% this week. Freddie said. The direction of fixed rates, however, is likely to change, according to Freddie chief economist Frank Nothaft and the National Association of Home Builders. “Improvements in the job market and rising wages will likely put upward pressure on mortgage rates in the coming months,” Nothaft said in a written statement. In its May Housing Facts, Figures and Trends report, the NAHB forecasted that the 30-year will average 5.9% this year and escalate to 6.6% next year. In the meantime, however, the 10-year Treasury note traded late Thursday at a 3.89% yield — the lowest in over a year — and price of 101.91. The 5-year Treasury-indexed hybrid adjustable-rate mortgage, averaged 5.10%, Freddie said, up three BPS from last week. The 1-year, Treasury-indexed ARM also reportedly went up — by five BPS to 4.26%. Accordingly, the ARM share of applications decreased to one-third from nearly 35%, according to the Mortgage Bankers Association’s latest application survey, which runs one week behind Freddie’s. NAHB expects the 1-year adjustable rate to average 4.4% and 5.2% in 2005 and 2006, respectively. The 1-year Treasury Bill was 3.32% as of Wednesday, according to the latest Federal Reserve Statistical Release. The bill, also known as the 1-year constant maturity Treasury index, is reportedly used roughly on half of all ARMs. Loan originators were able to soak up more sun over Memorial Day weekend as application volume decreased last week — as reflected in the 3% decrease in the Market Composite Index to 709.1, MBA reported. The weekly overall volume decline was mostly the result of a 4% decline in purchase money requests. Despite that refinance requests budged down from the previous week, the refi share of applications nudged up from the previous week to 41%. |
Coco Salazar is an assistant editor and staff writer for MortgageDaily.com. email: [email protected]
