Activity Up as Rates Shoot Past 2009 Levels

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MORTGAGE EXPERT
3 · 25 · 10

As fixed rates have climbed more than 10 basis points over the past year, adjustable rates soared more than 60 BPS. During the past week, meanwhile, mortgage activity strengthened.

Creeping up 3 basis points from last week, the average 30-year fixed-rate mortgage was 4.99% in Freddie Mac’s Primary Mortgage Market Survey for the week ended March 25. The 30-year was 14 BPS worse than a year ago.

Unchanged in the Mortech-MortgageDaily.com Mortgage Market Index for the week ended March 24 were the conventional 30-year rate, at 4.875%; the 30-year jumbo rate, at 5.625%; and the 15-year conventional rate, at 4.250%.

The average 15-year fixed-rate mortgage in Freddie’s report was just 0.01% higher than the previous week at 4.34%.

The yield on the 10-year Treasury bond was 3.913% this afternoon, soaring from 3.68% at last Thursday’s close, according to U.S. Department of the Treasury data and WSJ.com. The 23 basis-point rise far outpaced the increase in fixed rates and indicates rates might be higher in next week’s reports.

Market watchers can expect a rise in rates over the next week or so according to three-quarters of the panelists surveyed by Bankrate.com for the week March 25 to March 31. Rates will fall at least 3 BPS based on 19% of the panelists, and the rest predicted no change.

With a 5-basis-point weekly rise, the five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 4.14% in Freddie report.

Also 8 BPS higher was the one-year Treasury-indexed ARM, which averaged 4.20%. The one-year averaged 4.85% a year ago. The yield on the one-year Treasury bill, which is used to determine rate increases or decreases for the one-year ARM, climbed to 0.44% yesterday from 0.41% one week earlier.

The six-month London Interbank Offered Rate closed yesterday with an 0.43% yield, up from 0.40% reported last week by Bankrate.com.

ARM business accounted for 4.8% of activity in the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ended March 19, up from 4.6% the prior week.

Mortgage activity rose 2% based on the Mortgage Market Index, which was 229. A week earlier, the mortgage banker’s latest report indicated that overall applications eased 4%.

Data from the Mortgage Market Index indicated that the average U.S. loan amount rose to $206,882 from $206,364 a week earlier. Washington, D.C.’s, average $341,786 loan amount was the highest in the country, while West Virginia’s $142,035 was the lowest.

The Mortgage Market Index report also reflected a 40% refinance share, down from 42% seven days earlier. This week’s share reflected a 27% rate-term share and a 13% cashout share.

Refinances were down 7% in MBA’s survey, which reflect data from last week. MBA’s refinance share fell to just under two-thirds — the lowest share since Oct. 30, 2009 — from just over two-thirds.

MBA said purchase activity was up 3%.

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Mortgage Daily Staff

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