Fixed rates again reached a new low, though that wasn’t enough to prompt more borrowers to take action.
It was a new record for the 30-year fixed-rate this week according to Freddie Mac’s latest survey of 125 mortgage lenders. The 30-year declined 1 basis point from last week to 4.56 percent. A year ago, the 30-year average was 5.20 percent. The 30-year was lowest in the West, where it averaged 4.51 percent.
Secondary rival Fannie Mae projected in its July forecast that the 30-year will average 4.6 percent in the third and fourth quarters.
The conventional 30-year averaged 4.485 percent in the Mortech-MortgageDaily.com Mortgage Market Index for the week ended July 21, slipping from 4.555 percent a week earlier. The jumbo 30-year fell to 5.47 percent from 5.55 percent — trimming the jumbo-conventional spread to 99 BPS from last week’s 100 BPS.
The yield on the 10-year Treasury bond fell to 2.96 percent Thursday from 3.00 percent a week earlier, based on data reported by the U.S. Department of the Treasury. The movement suggests the 30-year could ease in next week’s reports.
More than two-thirds of panelists surveyed by Bankrate.com for the week July 22 to July predicted rates will stay within 2 BPS of their current levels during the next week. But 22 percent expected an increase, while 11 percent forecasted a decline.
Freddie Mac Chief Economist Frank Nothaft explained in this week’s report that mortgage rates moved lower in tandem with recent signs of weakening confidence in the strength of the economy.
Freddie said the average 15-year fixed-rate mortgage also fell to a new record: 4.03 percent. Seven days earlier, the 15-year was 4.06 percent.
Down 6 BPS from last week, the five-year Treasury-indexed adjustable-rate mortgage averaged 3.79 percent in Freddie’s survey.
The one-year Treasury-indexed ARM fell to 3.70 percent from 3.74 percent a week earlier and 4.77 percent 52 weeks earlier, according to Freddie. Fannie sees the one-year averaging 3.8 percent in the current quarter and in the fourth quarter.
The Treasury reported the yield on the one-year Treasury bill closed yesterday at 0.27 percent, the same as the prior Thursday. Bankrate.com reported the six-month London Interbank Offered Rate fell 2 BPS from last week to 0.71 percent as of Wednesday.
Although the one-year ARM average declined 1 basis point last week and the 30-year fixed-rate was unchanged, ARM share moved lower in the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ended July 16. MBA said ARM share was 5.2 percent compared to 5.5 percent the prior week.
ARM share will average 5 percent in the third quarter then rise to 6 percent in the final quarter of this year, Fannie forecasted.
The drop in rates this week failed to push mortgage activity higher, with the Mortgage Market Index easing to 333 from 334 last week. The report indicated that the average U.S. loan amount edged up to $216,013 from $215,606. The highest state average was Hawaii’s $285,418, while the lowest was South Dakota’s $150,931.
This week’s refinance share was 61 percent, about the same as last week, according to the Mortech-MortgageDaily.com report. The latest level reflected a 46 percent rate-term share and a 14 percent cashout share.
Fannie predicted the refinance share will be 57 percent this quarter and 47 percent in the fourth quarter.