Mortgage Daily

Published On: May 29, 2008

 

Rates RisingAverage 30-year 6.08%

May 29, 2008

By SAM GARCIA

Most mortgage rates rose and may be headed higher.

The average 30-year fixed-rate climbed 0.10% from the prior week to 6.08% in Freddie Mac’s Primary Mortgage Market Survey announced today. The 30-year was lower, however, than 6.42% a year earlier.

The average 15-year fixed-rate rose 11 basis points over the past seven days to 5.66%, the survey said.

Both the 15-year and the 30-year fixed-rate averages tend to move with the 10-year Treasury yield, which today rose to 4.11% from 3.94% a week prior, data from CNNMoney indicated.

Freddie’s Chief Economist Frank Nothaft attributed the upward movement to market concerns that the Federal Reserve may increase the federal funds rate by 25 BPS to stave off inflation.

More than two-thirds of the mortgage bankers, mortgage brokers and “other industry experts” surveyed by Bankrate.com for the week May 29 to June 4 expect rates to rise more than 2 BPS during the next 35 to 45 days. One-quarter forecast a decline.

The Treasury-indexed five-year hybrid adjustable-rate mortgage averaged 5.62 in Freddie’s survey, up just 0.01% from last week.

The 1-year Treasury-indexed ARM average was 5.22%, 2 BPS lower than the prior week. The underlying index, the 1-year Treasury yield, was 2.11% yesterday, 4 BPS higher than last week.

The 6-month London Interbank Offered Rate, which is also used as an ARM index, was 2.85%, Bankrate.com said Wednesday. LIBOR was 2.80% seven days earlier.

ARMs accounted for 9% of loan applications tracked by the Mortgage Bankers Association in its Weekly Mortgage Applications Survey for the week ending May 23, down from 10% in last week’s survey.

MBA said overall mortgage applications fell 5% from the previous week, bringing the seasonally adjusted Market Composite Index to 593.3. Though purchase applications moved fractionally higher, refinances fell 9%, leaving the refinance share at 46% compared to 48% the prior week.

 

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

e-mail: [email protected]

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