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Rates Better, But Not New Activity

Rates

Rates reached record lows but failed to push new mortgage activity higher this week. One indicator suggests rates will be higher in the next set of reports.

Again the average 30-year fixed-rate mortgage has reached a new low: 4.54 percent. Freddie Mac reported the 30-year at 4.56 percent last week and 5.25 percent a year ago. The regulator of Freddie and rival Fannie Mae, the Federal Housing Finance Agency, reported that the 30-year averaged 5.00 percent last month, 12 basis points below May.

The conventional 30-year was unchanged from last week at 4.485 percent in the Mortech-MortgageDaily.com Mortgage Market Index for the week ended July 28. The jumbo 30-year, however, improved 5 BPS to 5.42 percent. The resulting jumbo-conforming spread was trimmed to 94 BPS from 99 BPS last week.

The yield on the 10-year Treasury bond, which mortgage rates tend to follow, closed today at 3.03 percent, according to data reported by the U.S. Department of the Treasury. The 7-basis-point increase from last Thursday suggests mortgage rates might be higher in next week’s reports.

But nearly three-quarters of Bankrate.com panelists for the week July 29 to Aug. 4 expected no change in mortgage rates. A minimum 3-basis-point rise was predicted by 21 percent, while just 5 percent forecasted a decline.

The average 15-year fixed-rate mortgage was 4.00 percent, 3 BPS better than Freddie’s prior survey and also a record. FHFA said the 15-year fell 11 BPS from the prior month to 4.47 percent in June.

Down 3 BPS from last week, Freddie said the five-year Treasury-indexed adjustable-rate mortgage averaged 3.76 percent its Primary Mortgage Market Survey for the week ended today.

The one-year Treasury-indexed ARM saw the biggest improvement from last week: 6 BPS. Freddie reported the one-year at 3.64 percent today and 4.80 percent a year earlier. The underlying one-year Treasury bill yield rose to 0.30 percent today from 0.27 percent seven days earlier, the Treasury reported.

The six-month London Interbank Offered Rate was reported yesterday by Bankrate.com at 0.69 percent, lower than 0.71 percent the previous week.

ARM share was 5.7 percent in the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ended July 23, higher than the previous week’s 5.2 percent. The increase came despite that the one-year fell more than the 30-year last week.

Record-low interest rates failed to spark any improvement in overall business, which fell 7 percent based on the Mortgage Market Index. The average loan size decreased to $214,257 from last week’s $216,013. Washington, D.C.’s, $291,229 was the highest average, and South Dakota’s $135,825 ranked it lowest.

Refinance share fell to 59 percent from 61 percent in last week’s Mortech-MortgageDaily.com report. This week’s share reflected a rate-term refinance share of 44 percent and a 15 percent cashout refinance share.

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