Mortgage Daily Logo

Rates Fall, ARM Share Continues Rising

Rates

Mortgage rates declined for the first time in four weeks. Meanwhile, the share of borrowers opting for an adjustable rate has risen for six consecutive weeks.

In its survey of 125 thrifts, commercial banks and mortgage lending companies for the week that ended June 18, Freddie Mac reported the average 30-year fixed-rate mortgage at 5.38%, decreasing for the first time since May 21 — when it stood at 4.82%. The 30-year was 5.59% in the prior survey and 6.42% a year earlier.

Freddie said the average 15-year fixed-rate mortgage was 4.89%, 17 basis points better than seven days prior.

The secondary lender’s chief economist, Frank Nothaft, said tame inflation pushed rates lower.

If the 10-year Treasury bond is any indication, mortgage rates might head lower. The 10-year yielded 3.816% this afternoon, lower than 3.930% the prior Thursday.

The majority of Bankrate.com’s 100 panelists surveyed for the week June 18 to June 24 predicted rates will fall at least 0.03% during the next 35 to 45 days, while more than one-quarter forecasted no change and one-fifth projected an increase.

The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 4.97%, 20 BPS better than the previous week, according to Freddie’s survey.

But the one-year Treasury-indexed ARM averaged just 9 BPS less than a week earlier at 4.95%. Data reported by the U.S. Department of the Treasury indicated the underlying one-year Treasury bill yield fell to 0.50% yesterday from 0.55% a year earlier.

The six-month London Interbank Offered Rate was 1.16% as of yesterday, Bankrate.com reported. LIBOR, which is the index on a big share of outstanding subprime ARMs, was 1.27% seven days prior.

In its Weekly Mortgage Applications Survey for the week ended June 12, the Mortgage Bankers Association reported that ARM share increased to 4.3% from 3.4% in the previous survey. ARM share has risen each week since MBA’s survey for the week ended May 1 — when it was 2.1%.

The increase in ARM share often accompanies periods where rates are rising from recent lows as borrowers and originators try to mitigate the impact of rising rates.

MBA reported that overall loan applications during the latest week declined 16% on a seasonally adjusted basis from the previous week — reflecting last week’s surge in mortgage rates. The Market Composite Index ended the week at 414.4.

Refinance applications were off nearly one-quarter, pushing the refinance share down to 54% from the previous week’s 59%, MBA said. Purchase applications were down a more moderate 4%.

Related Posts

Mortgage Rates Up 92 BPS From Year Ago

Mortgage Rates Up 92 BPS From Year Ago

Mortgage Rates Up 92 BPS From Year Ago Weekly interest rates might continue holding Oct. 25, 2018 By SAM GARCIA Mortgage Daily Over the past year, weekly fixed interest rates on single-family loans have soared 92 basis points. But little change was reported from last...

Mortgage Rates Up 92 BPS From Year Ago

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 Rates Up 92 BPS From Year Ago

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 Up 92 BPS From Year Ago

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 Up 92 BPS From Year Ago

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...

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 home closing documents have 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...

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 mortgage...

Newsletter

Don’t worry, we don’t spam

calculate your monthly mortgage payment

Related Topics

Helpful Links

Daily mortgage rate trends

Best mortgage lenders

First-time homebuyers programs by state

Loan limits by state

Types of mortgages

APR vs interest rate

Understanding PMI