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New Record Low Ahead for 15-Year?

Rates

The 15-year fixed rate is sitting at its lowest level on record, and that record could be broken next week. The 30-year is also poised for a new low.

There was no change this week in the average 30-year fixed-rate mortgage, which Freddie Mac reported at 4.37 percent. The lowest level recorded for the 30-year was 4.32 percent in Freddie’s survey for the week ended Sept. 2. The 30-year was lower than at the same time last year when it was 5.04 percent.

Perceived slow growth and low inflation relieved any upward pressure on rates, Freddie Chief Economist Frank Nothaft explained in the report.

In the Mortech-Mortgage Daily Mortgage Market Index report for the week ended Sept. 22, the conventional 30-year was 3 BPS better than a week earlier at 4.347 percent. The jumbo 30-year was also down 3 BPS, maintaining the jumbo-conventional spread at 98 BPS.

A look at the 10-year Treasury yield indicates it fell 21 BPS from last Thursday to 2.56 percent today, according to U.S. Department of the Treasury data. The movement suggests fixed-rate mortgages could be 10 or more BPS better in next week’s reports.

While nearly a quarter of panelists surveyed by Bankrate.com for the week Sept. 23 to Sept. 29 projected rates would fall at least 3 BPS over the next week, 71 percent predicted no change. An increase was forecasted by 6 percent.

Also unchanged was the average 15-year fixed-rate mortgage, which Freddie quoted at 3.82 percent. It was the lowest level on record for the 15-year.

At 3.54 percent, the five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 1 basis point less than in Freddie’s previous survey.

The lone riser, the one-year Treasury-indexed ARM, averaged 6 BPS more than in Freddie’s prior report at 3.46 percent. During this week in 2009, the one-year averaged 4.52 percent.

The index used on the one-year ARM, the yield on the one-year Treasury bill, closed today at 0.25 percent, the same as seven days earlier, the Treasury reported. A popular subprime ARM index, the six-month LIBOR, closed Wednesday at 0.47 percent, trimming 0.01 percent off of last week’s level, according to Bankrate.com.

Fewer loan applicants opted for ARMs in the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ended Sept. 17, with ARM share falling to 5.9 percent from the previous week’s 6.2 percent.

Mortgage broker activity eased this week, based on the Mortgage Market Index — which was down 3 percent from last week to 295.

Mortgage banker applications fell 1 per percent last week on a seasonally adjusted basis in the MBA survey, with refinances down 1 percent and purchases down 3 percent.

The Mortech Mortgage Daily report indicated that the average U.S. loan amount rose to $212,052 from $211,313 a week ago. Washington, D.C., averaged highest this week at $312,577, and West Virginia’s $145,173 was lowest.

Refinance share in the Mortgage Market Index report slipped to 60 percent from 61 percent last week. This week’s cashout share was 15 percent, and rate-term refinances accounted for 45 percent.

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