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Mixed Mortgage Market

Mixed Mortgage MarketAverage 30-year 5.47%

December 11, 2008


Fixed-rate mortgages fell, adjustable-rate mortgages rose and ARM indices decreased. Refinance activity held up, though purchase and FHA business tumbled.

Average 30-year fixed-rate mortgages declined to 5.47% in Freddie Mac’s Primary Mortgage Market Survey for the week ending Dec. 11. The prior week, the 30-year averaged 5.53% while it was at 6.11% a year earlier.

The 30-year is at its lowest level since March 25, 2004.

The average 15-year fixed-rate mortgage saw a steeper weekly decline — 13 basis points to 5.20%.

Freddie Chief Economist Frank Nothaft said rates tumbled following last week’s employment report, “which showed the largest monthly decline in jobs since December 1974.”

Fixed-mortgage rates tend to move with the 10-year Treasury yield, which was 2.644% early today. Seven days earlier, the 10-year yielded 2.657%.

More than half — 56% — of the mortgage bankers, mortgage brokers and other “experts” surveyed by for the week Dec. 11 to Dec. 17 predicted mortgage rates will fall further. An increase was forecasted by 6%, while 38% expected rates to stay within 2 BPS of their current levels during the next 35 to 45 days.

The five-year Treasury-indexed hybrid ARM averaged 5.82% in Freddie’s latest survey, climbing from 5.77% seven days earlier.

The one-year Treasury-indexed ARM rose 7 BPS to 5.09%. The yield on the one-year ARM’s index, the 1-year Treasury yield, was 0.49% yesterday, falling from 0.70 a week prior.

The London Interbank Offered Rate, another ARM index, was 2.53% as of yesterday, reported. LIBOR was 0.04% higher the previous week.

Mixed activity on ARM yields push the ARM share of application activity slightly lower to 1 percent, the Mortgage Bankers Association said in its Weekly Mortgage Applications Survey for the week ending Dec. 5.

MBA said overall applications fell 7% on a seasonally adjusted basis from the prior week, bringing the Market Composite Index to 796.8. A 17% decline in purchase applications and a 21% decrease in government applications drove the decline.

Refinances held up, however. Applications for refinances edged 1% lower, bringing the refinance share to 74% from 69% a week earlier.


Sam Garcia worked in mortgage lending for twenty years prior to becoming publisher of


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