Fixed mortgage rates fell to a record low, mortgage activity improved and the average mortgage loan amount increased. But the jumbo spread deteriorated further.
In its Primary Mortgage Market Survey for the week ended June 24, Freddie Mac reported the average 30-year fixed-rate mortgage at 4.69 percent, falling from the prior week’s 4.75 percent. The 30-year was 5.42 percent a year earlier.
It was the lowest level on record since April 1971 — when the secondary mortgage lender began collecting data on 30-year mortgage rates.
The conventional 30-year moved 11 BPS lower to 4.652 percent in the Mortech-MortgageDaily.com Mortgage Market Index for the week ended June 23. At the same time, the jumbo 30-year fell 9 BPS to 5.590 percent — causing the conventional-jumbo spread to widen to 94 BPS from last week’s 92 BPS. It was the third consecutive week of deterioration for the jumbo spread.
Freddie’s secondary rival, Fannie Mae, predicted that the 30-year will average 5.0 percent each quarter of 2010.
Freddie’s and Fannie’s regulator, the Federal Housing Finance Agency, reported that the conforming 30-year rate averaged 5.12 percent in May, the same as in April.
The yield on the 10-year Treasury bond was 3.126 percent during trading today, sinking from 3.21 percent a week prior, based on data from the U.S. Department of the Treasury and WSJ.com. The movement offers little direction about where rates will land next week.
Bankrate.com reported that the majority of its panelists for the week June 24 to July 3 expected no changes in mortgage rates over the next week. But more than a third projected an increase of at least 3 BPS, and 10 percent forecasted a decline.
The average 15-year fixed-rate mortgage fell 7 basis points from Freddie’s prior survey to 4.13 percent — the lowest level on record since the McLean, Va.-based firm began tracking the 15-year in September 1991. The FHFA said the 15-year averaged 4.58 percent last month, 6 BPS worse than April.
Down 5 BPS for the week, the five-year Treasury-indexed hybrid adjustable-rate mortgage came in at 3.84 percent — the lowest point since Freddie started surveying lenders about the five-year in January 2005.
While the one-year Treasury-indexed ARM also fell 5 BPS, to 3.77 percent, it had been lower in the May 6, 2004, survey at 3.76 percent. A year ago, the one-year stood at 4.93 percent. Fannie has the one-year averaging 4.1 percent in the second and third quarters, lower than the first quarter’s 4.3 percent.
The Treasury reported that the yield on the one-year Treasury bill — the underlying index for the one-year ARM — was 0.30 percent yesterday, unchanged from seven days earlier. The yield on the six-month London Interbank Offered Rate, which is used as an index on many subprime ARMs, was also unchanged — coming in at 0.75 percent.
ARM activity declined to 4.9 percent in the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ended June 18 from 5.2 percent the prior week. The lower share came despite that the one-year ARM fell 9 BPS last week even as the 30-year was 3 BPS higher.
An uptick in mortgage activity was reported in the Mortgage Market Index, which climbed to 274 from 257 last week. The average U.S. loan amount also increased, to $215,847 from $211,982. The highest average was Washington, D.C.’s, $306,728, and the lowest was Nebraska’s $155,125.
Refinance activity rose to 51 percent from the previous week’s 49 percent in the Mortech-MortgageDaily.com report. The share of rate-term refinances was 38 percent, while the cashout refinance share was 13 percent.
MBA said that a week earlier, overall applications fell 6 percent on a seasonally adjusted basis. Refinances fell 7 percent, squeezing the refinance share to 74 percent from the previous week’s 75 percent. Purchase applications fell just 2 percent.