During nearly every week for almost three months the 30-year mortgage has established a new all-time low. The latest record was the result of more weak economic data.
After falling to the lowest level on record last week, the 30-year fixed-rate mortgage improved another 4 basis points to 3.62 percent, according to Freddie Mac’s survey of 125 mortgage lenders for the week ended Thursday. A new record has been set in 10 out of the last 11 surveys. The 30 year was 4.60 percent a year earlier.
Less consumer spending and a contraction in the manufacturing industry drove the decline, Freddie’s chief economist, Frank Nothaft, said in the report. Also pulling down rates were a downward revisions in personal expenditures and consumer spending.
As it stands, mortgage rates are unlikely to be much difference in Freddie’s next report. The yield on the 10-year Treasury note averaged 1.63 percent during the period when Freddie surveyed its lenders for this week’s report, while the 10-year yield closed at 1.62 percent Thursday, according to data from the Department of the Treasury.
Rates will fall at least 3 BPS during the next week based on 38 percent of the panelists surveyed by Bankrate.com for the week July 5 through July 11. The rest were evenly split about whether rates would rise or remain the same.
Jumbo mortgages were priced at a 72-basis-point premium over conforming rates in the U.S. Mortgage Market Index report from Mortech Inc. and Mortgage Daily for the week ended June 29, a little better than the 73-basis-point spread in the previous report.
Also establishing a new record low was the 15-year fixed-rate mortgage, which was down 5 BPS to 2.89 percent in Freddie’s survey. The discount for a 15-year loan improved to 73 BPS from 72 BPS in the previous report.
No weekly change was recorded for the five-year, Treasury-indexed, hybrid, adjustable-rate mortgage, which Freddie said averaged 2.79 percent.
But the one-year Treasury-indexed ARM declined to 2.68 percent from 2.74 percent seven days earlier and 3.01 percent a year earlier. The underlying index, the yield on the one-year Treasury note, fell to 0.19 percent from 0.22 percent last Thursday, Treasury Department data indicate.
No change occurred from last week for the six-month London Interbank Offered Rate, which Bankrate.com reported at 0.73 percent.
ARM share was 3.3 percent in the Mortgage Market Index report, about the same as in the previous report.