Improvement Seen in Mortgage Market

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3 · 04 · 10

Fixed mortgage rates fell, loan applications rose and the jumbo spread narrowed. But the one-year adjustable-rate mortgage was worse.

In its Primary Mortgage Market Survey for the week ended today, Freddie Mac said the average 30-year fixed-rate mortgage fell to 4.97% from 5.05% a week earlier and 5.15% a year earlier.

The conventional 30-year rate was 4.875% in the Mortgage Market Index for the week ended March 3, unchanged from the prior report and the same place it has been since Jan. 13. The index reflects data from 139,881 pricing inquiries at Mortech Inc. But the 30-year jumbo rate fell to 5.750% from 6.000%, tightening the jumbo spread to 88 BPS from 113 BPS.

Freddie reported the average 15-year fixed-rate mortgage at 4.33%, lower than 4.40% the previous week. The conventional 15-year rate was 4.25% in the Mortgage Market Index report, unchanged since Jan. 13.

The yield on the 10-year Treasury bond was 3.608% during trading today, based on data from Dow Jones & Co. The 10-year yield closed at 3.64% last Thursday, according to data from the U.S. Department of the Treasury. The movement indicates mortgages rates might be higher in next week’s reports.

A majority of the panelists surveyed by for the week March 4 to March 10 predicted that rates will remain within 2 BPS of their current levels during the next 35 to 45 days. An increase was projected by 43 percent, while none forecasted a decline.

Down 5 BPS from Freddie’s previous survey, the five-year Treasury-indexed hybrid ARM averaged 4.11%.

But just as it moved in the opposite direction last week, the one-year Treasury-indexed ARM average rose this week — 12 BPS to 4.27%. The one-year averaged 4.86% a year ago.

The yield on the one-year Treasury bill, which is used as the index for the one-year ARM, eased to 0.33% yesterday from 0.34% seven days prior, the Treasury reported. The six-month London Interbank Offered Rate, which is used an index on many subprime ARMs, crept down to 0.38% yesterday from 0.39% the previous week, reported.

ARM share edged up to 4.8% in the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ended Feb. 26 from 4.7% in the prior survey.

Mortgage activity rose 3% from last week based on the Mortgage Market Index, which was 35 inquiries-per user, higher than 34 the prior week. As activity improved, the average U.S. loan amount climbed to $209,038 from $205,721 seven days earlier. Washington, D.C.’s, $298,261 was highest, followed by $294,380 in Hawaii and $274,858 in Massachusetts. North Dakota’s $140,272 was lowest.

Nearly a week earlier, overall mortgage applications rose 15% on a seasonally adjusted basis in MBA’s survey. Purchase applications were 9% higher while refinances shot up 17%.

The total refinance share increased to 45% in the latest report from 44% the prior week. This week’s refinance share reflected a 30% rate-term share and a 14% cashout share.

MBA’s older data reflected that refinance share rose to 69% from the prior week’s 68%.


Mortgage Daily Staff


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