|As government loan applications and the 1-year adjustable-rate mortgage improved, purchase 1003s sank to their lowest level in more than five years.
The average 30-year fixed-rate mortgage was 6.52% in Freddie Mac’s Primary Mortgage Market Survey for the week ending Aug. 7. The 30-year was unchanged from a week earlier and 7 basis points better than a year earlier.
The 15-year average fixed-rate rose 0.03% from the prior week to 6.10%, Freddie said.
Fixed-mortgage rates tend to move with the 10-year Treasury yield, which was 3.99% near midday, according to CNNMoney. Last Thursday, the yield was 3.97%.
Of the 100 mortgage bankers, mortgage brokers and “other industry experts” surveyed by Bankrate.com for the week Aug. 7 to Aug. 13, 71 see rates rising at least 3 BPS during the next 35 to 45 days, while 21 predict a drop and 8 forecast no change.
Freddie reported that 5-year year Treasury-indexed hybrid ARMs averaged 6.05% in the latest survey, off 2 BPS from a week earlier.
The average 1-year Treasury-indexed ARM reportedly was 5 BPS better than the previous week at 5.22%. The underlying index, the 1-year Treasury yield, was 2.26% yesterday, just 0.01% lower than it was seven days earlier, according to data published by the U.S. Treasury.
Another ARM index, the 6-month London Interbank Offered Rate, was 3.11% as of yesterday, Bankrate.com reported. LIBOR stood at 3.12% a week earlier.
ARMs accounted for 7% of loan applications tracked by the Mortgage Bankers Association for the week ending Aug. 1, barely changed from the previous week.
Overall applications increased 3% on a seasonally adjusted basis in MBA’s latest survey, bringing the Market Composite Index to 432.6. Refinances, which were up 4%, drove the increase — bringing the refinance share of overall 1003s to 36% from 35% the prior week.
Purchase applications were up 2%, according to MBA’s survey. Freddie’s Chief Economist noted that the level of purchase activity was at its “slowest pace since the week ending Feb. 21, 2003.”
MBA reported that government applications were 7% higher.
Sam Garcia worked in mortgage lending for twenty years prior to becoming publisher of MortgageDaily.com.