Market Improves Except Jumbo

Rates

Mortgage Daily Staff

                                                 June 10, 2010

Mortgage rates eased and might have done even better if the stock market hadn’t surged. This week’s new loan activity was better than last week’s, though the jumbo spread deteriorated.

Improving 0.07% from last week, the average 30-year fixed-rate mortgage came in at 4.72% in Freddie Mac’s Primary Mortgage Market Survey for the week ended today. The 30-year was 5.59 a year earlier.

The conventional 30-year in the Mortech-MortgageDaily.com Mortgage Market Index report for the week ended June 9 improved to 4.780% from last week’s 4.836%. At the same time, the jumbo 30-year rate rose to 5.670% from 5.650% — pushing the jumbo spread to 89 BPS from last week’s 81 BPS.

Off just 3 basis points from last week, the average 15-year fixed-rate mortgage was a record-low 4.17% in Freddie’s survey. The conventional 15-year was down 4 BPS to 4.180% in the most recent Mortech-MortgageDaily.com report.

Frank Nothaft, Freddie’s chief economist, attributed the decline in mortgage rates to “a relatively weak employment report.”

The yield on the 10-year Treasury bond was 3.294% during trading today, falling from 3.39% at last Thursday’s close, based on data from the U.S. Department of the Treasury and WSJ.com.With the 30-year having moved similarly, the 10-year offers little insight into which direction rates will head before next week’s reports.

The 10-year Treasury price — which moves in the opposite direction of the yield — was down a dollar during trading today as the Dow Jones Industrial Average ascended 200 points.

A majority of the panelists surveyed by Bankrate.com for the week June 10 to June 16 expected mortgage rates to stay within 2 BPS of their current levels during the next seven or so days, while 44% expected an increase. Nobody forecasted a decline.

The five-year Treasury-indexed adjustable-rate mortgage eased 2 BPS to 3.92%, Freddie reported.

Improving 4 BPS, the one-year Treasury-indexed ARM averaged 3.91% in Freddie Mac’s report. The one-year averaged 5.04% a year ago and hasn’t been this low since the week ended May 27, 2004.

The yield on the one-year Treasury bill closed yesterday at 0.33%, lower than 0.38% the prior Wednesday. The one-year yield is used as the index for the one-year ARM, while many subprime ARMs utilize the six-month London Interbank Offered Rate. LIBOR finished yesterday at 0.75%, while it yielded 0.76% the prior Wednesday.

ARM applications amounted to 5.1% of activity in the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ended June 4. Seven days earlier, ARM share was 5.2%.

Technical staff at Mortech Inc. this week identified a programming glitch in the Mortgage Market Index that resulted in reporting an index value that was a week older than indicated — impacting reports issued between April and last week. After correcting the glitch and adjusting the index, mortgage activity was up 22% this week.

Last week, based on MBA’s report, applications fell 12% on a seasonally adjusted basis. Purchase activity was down 16% and refinances fell 14%. Refinance share eased to 72% from 74%.

Refinances represented half of this week’s activity in the Mortech-MortgageDaily.com report, higher than 48% last week. This week’s rate-term share was 36%, and the cashout share was 14%.

The index reflects the activity of mortgage originators who subscribe to Mortech. The full report indicated that the average mortgage amount rose to $215,771 from $212,806 seven days earlier. The highest average was Washington, D.C.’s., $318,812, and Nebraska’s $156,741 was the lowest.

Mortgage Daily Staff

Related Posts

Mortgage Rates Up 92 BPS From Year Ago

Over the past year, weekly fixed interest rates on single-family loans have soared 92 basis points. But little change was reported from last week, and more of the same is expected. On conventional loans utilized to finance a home purchase with amounts up to the...

Mortgage Rate Forecasts Have Little Change Ahead

Thirty-year mortgage rates moved lower this past week and this past month. Short- and long-term forecasts have little movement ahead for mortgage rates. Ellie Mae Inc.'s Origination Insight Report | September 2018 indicated that average 30-year note rates on...

Mortgage Rates Soar, Could Sink in Next Report

An expected surge in mortgage rates came to fruition this week. The latest forecast has fixed rates tumbling in next week's report. A new index for adjustable-rate mortgages moved lower. A stunning 19-basis-point surge from the preceding week left average 30-year...

Mortgage Rates Dip, But Likely to Skyrocket

Mortgage rates retreated a modest amount just one week after climbing to a seven-year high. The next rate report, however, is likely to reflect significant escalation. Prospective 30-year borrowers using the LendingTree network during September were offered an average...

Mortgage Rates Little Changed, More of Same Ahead

Over the past week, there was little change in interest rates on home loans. During the next week, more of the same is likely. Recently rising rates have helped the Federal Home Loan Banks' earnings. Conventional mortgages with conforming loan amounts used to finance...

Popular posts

How Long Does It Take to Refinance a Mortgage
How Long Does It Take to Refinance a Mortgage

So, you’re interested in refinancing your mortgage. Maybe you want some extra capital to do that home project you’ve always dreamed of, interest rates are nearing record lows, or you want to start consolidating debt. Regardless of the motivation behind the refinance,...

How Does Refinancing a Mortgage Work
How Does Refinancing a Mortgage Work

A home purchase is considered an investment, and a robust one at that. Savvy owners are constantly looking for new ways to reduce debt, save money, pay less in interest, and ultimately build equity. Refinancing is one way to leverage your investment and do just that....

What Does It Mean to Refinance Your Home
What Does It Mean to Refinance Your Home

You can think of refinancing your mortgage as a debt redo. Essentially, you’ll swap out the existing loan for a new one - ideally with better terms and conditions. Only this time it could help you save money on high mortgage payments, rather than just borrow it....

Setting up the Utilities in My New House
Setting up the Utilities in My New House

All the tedious, time-consuming paperwork has been signed, sealed, and delivered. Your belongings are packed into what seems like a million boxes and you have a solid plan to haul all your existing furniture to the new place. Just as your boxes and furniture need to...

When Is My First Mortgage Payment Due?
When Is My First Mortgage Payment Due?

Navigating your way through a brand-new mortgage loan can be a difficult task, especially for first-time homeowners.   After handing over a large sum of money for the down payment and closing costs, it’s important to pay attention to the timing of your first...

Newsletter

Don’t worry, we don’t spam