Rates Better But Activity Worse

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3 · 11 · 10

Despite an across-the-board improvement in mortgage rates, mortgage activity eased this week. In an unusual alignment, the yield on the one-year Treasury and the six-month LIBOR were exactly the same this week and last week.

The average 30-year fixed-rate mortgage fell to 4.95% in Freddie Mac’s Primary Mortgage Market Survey for the week ended March 11. The average was 4.97 a week earlier and 5.03% a year earlier.

In the Mortech-MortgageDaily.com Mortgage Market Index report for the week ended March 10, the conventional 30-year rate averaged 4.875%, unchanged for the eighth consecutive week. The 30-year jumbo rate was also unchanged, averaging 5.75%.

The report reflected more than 135,416 pricing inquiries at Mortech Inc.

Freddie said the average 15-year fixed-rate mortgage was 4.32%, edging down from 4.33% seven days prior. The conventional 15-year was unchanged at 4.25% in the Mortech-MortgageDaily.com report.

The yield on the 10-year Treasury bond was 3.723% near midday, higher than 3.61% at the close seven days ago, according to data from the U.S. Department of the Treasury and WSJ.com. The movement suggests higher rates are ahead.

A majority of Bankrate.com panelists for the week March 11 to March 17 predicted mortgage rates will rise at least 3 BPS during “the next week or so.” No change was forecasted by 43% of the panelists, while there was no panelist who forecasted a decline.

Down 6 basis points from the previous week, the five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 4.05%, Freddie reported.

The average one-year ARM improved 5 BPS from a week ago to 4.22%, according to Freddie’s survey. The one-year was 58 BPS better than a year ago. Treasury data indicated that the yield on the one-year Treasury bill closed yesterday at 0.39%, up from 0.33% last Wednesday.

Bankrate.com reported that the six-month London Interbank Offered Rate also rose to 0.39% yesterday from 0.33% the prior week.

Despite last week’s increase in ARM rates and corresponding decrease in fixed rates, ARM share rose to 5.1% in the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ended March 5 from 4.8% in the previous survey.

New loan activity was down 3% from last week, with the latest Mortgage Market Index declining to 34.00 inquiries-per-user from 35.21 a week earlier. The average U.S. loan amount fell to $208,132 from $209,038. The highest average was Hawaii’s $289,626, and the lowest was Nebraska’s $148,487.

In MBA’s survey, which reflects activity from the prior week, overall activity rose 1% on a seasonally adjusted basis from a week earlier. A 7% rise in purchase activity wasn’t enough to offset a 2% decline in refinances.

Refinances represented 43% of activity in the Mortech-MortgageDaily.com report, falling from 45% the previous week. This week’s cashout share was 14%, while the rate-term share was 29%.

Last week’s refinance share in MBA’s report eased to 67% from 69%.

Mortgage Expert

Mortgage Daily Staff



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