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Activity Up as Rates Shoot Past 2009 Levels

Rates

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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