MTA Improves Again

The MTA was 4.5217% in December, according to U.S. Treasury data. This index for pricing adjustable-rate mortgages fell 14 basis points from the previous month and about 41 BPS from December 2006.

The MTA is calculated by taking the 12-month average of the 1-year Treasury yield’s monthly average, which was 3.26% in December. The index has fallen each month since April, when it stood at 5.0292%.

On Monday, the 1-year Treasury bill yielded 3.34%, the U.S. Treasury reported.

Also declining on a monthly basis were competing ARM indices the 11th District Cost of Funds Index and the 6-month London Interbank Offered Rate. While the COFI reportedly fell to 4.172% in November, the LIBOR decreased to 4.72% as of Dec. 26.

ARM applications account for about one-tenth of all mortgage applications, the Mortgage Bankers Association reported on Thursday.