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Refis Soar, Rates Ease

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Refis Soar, Rates EaseAverage 30-year fixed rate 5.85%

March 27, 2008

By NATALIE MERRILL

Following last week’s big drop in mortgage rates, refinance loan applications soared. This week, rates eased just slightly.

The average 30-year fixed-rate mortgage was 5.85%, falling 0.02% from last week’s 5.87%, according to Freddie Mac’s Primary Mortgage Market Survey for the week ending March 27. A year ago, the 30-year averaged 6.16%.

In last week’s survey, the 30-year tumbled 0.26%.

The 15-year fixed-rate averaged 5.34%, Freddie reported, rising 0.07% from the previous week’s 5.27%.

Data from CNNMoney showed that the yield on the 10-year Treasury was 3.50% today, about 14 basis points worse than a week earlier.

Of the 100 mortgage industry panelists surveyed by Bankrate.com for the week ending April 2, 50 believe rates will fall in the next 35 to 45 days, 29 foresee an increase, and 21 expect no change.

The five-year Treasury-indexed hybrid adjustable-rate mortgage had a 5.67% average, climbing from the 5.56% average as of last Thursday, Freddie’s survey indicated.

The average one-year Treasury-indexed ARM was 5.24% in Freddie’s latest survey, climbing nine BPS from a week earlier. The yield on the 1-year Treasury itself was 1.56% yesterday, 23 BPS worse than a week prior, according to U.S. Treasury data.

The six-month London Interbank Offered Rate, another ARM index, was 2.63% Thursday, up from 2.38% a week prior, Bankrate.com said.

ARM share of mortgage applications fell to 4% from the previous week’s 8% in the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending March 21.

Loan applications increased on all fronts, MBA’s survey indicated. Refinance applications, fueled by the big drop in fixed rates last week, jumped 82%. The refinance share of mortgage activity rose to 62% of total applications from 50% the week prior.

Purchase applications rose 11% over the prior seven days, while government loan applications saw an increase of 10%. The latest Market Composite Index was 965.9, jumping 48% from last week’s 652.0.

 

Natalie Merrill is a staff writer for MortgageDaily.com with a Journalism degree from Southern Methodist University.

e-mail: merrill.natalie@yahoo.com


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