Mortgage rates fell to fresh record lows, and mortgage activity continued higher this week.
There was no stopping the 30-year fixed-rate mortgage. Freddie Mac reported the average 30-year at 4.36 percent — another record low based on data back to 1971. The 30-year was 4.42 percent a week earlier and 5.14 a year earlier.
The conventional 30-year was mostly unchanged from last week, while the jumbo 30-year stayed at 5.200 percent in the Mortech-Mortgage Daily Mortgage Market Index report for the week ended Aug. 25. The resulting jumbo-conventional spread remained at 88 basis points.
Fixed rates are likely to come in around the same level next week, based on the 10-year Treasury yield — which closed at 2.50 percent today and 2.58 percent a week earlier based on data from the U.S. Department of the Treasury. The 8-basis-point weekly decline wasn’t far from the 6-basis-point decline with the 30-year mortgage.
Half of the panelists surveyed by Bankrate.com for the week Aug. 26 to Sept. 2 agreed that rates will linger at current levels over then next seven days or so. But 30 percent see further declines, while 20 percent projected rates will rise at least 3 BPS.
Freddie said the average 15-year fell 4 BPS from last week to 3.86 percent — the lowest level recorded since Freddie began tracking the 15-year in 1991.
Maintaining a record-low 3.56 percent, Freddie reported that the five-year Treasury-indexed hybrid adjustable-rate mortgage didn’t change from last week.
But the one-year Treasury-indexed ARM did change — trimming 1 basis point off to 3.52 percent, Freddie’s report indicated. The one-year averaged 4.69 percent in the same week last year. The underlying index, the yield on the one-year Treasury bill, was unchanged from last Thursday at 0.25 percent, the Treasury reported.
The yield on the six-month London Interbank Offered Rate, the index on many subprime ARMs, closed Wednesday at 0.52 percent, Bankrate.com reported. LIBOR was 0.58 percent the previous Wednesday.
ARM share was 5.8 percent in the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ended Aug. 20, up marginally from 5.7 in the previous survey.
Mortgage activity edged up slightly from last week, based on the Mortgage Market Index — which increased to 355 Wednesday from 350. The index, which reflects new traffic at mortgage brokerage shops, was up for the fourth consecutive week.
Last week, mortgage bankers saw new applications increase 5 percent on a seasonally adjusted basis, MBA reported. Refinances rose 6 percent and purchases were up less than a percent.
The average U.S. loan amount in the Mortgage Market Index report was $214,838, lower than $215,694 last week. Washington, D.C.’s $290,953 average enabled the district to maintain its grip on the highest average loan amount. South Dakota’s $151,741 was the lowest state average.
Refinance share nudged down slightly from seven days earlier, to 64 percent in the Mortech-Mortgage Daily report. The rate-term share was 49 percent, and the cashout share was 15 percent.