Mortgage rates rose as fast as they fell recently — abruptly ending a brief refinance wave.
In its Primary Mortgage Market Survey for the week ending Sept. 25, Freddie Mac reported the average 30-year fixed-rate mortgage at 6.09% — 31 basis points higher than the prior week. The 30-year had fallen each week since Aug. 14, when it stood at 6.52%. A year ago, the 30-year stood at 6.42%.
The average 15-year fixed-rate mortgage soared 42 BPS from week earlier to 5.77%, Freddie said.
“Mortgage rates followed Treasury bond yields higher this week amid market uncertainty over the current state of the economy,” Freddie Chief Economist Frank Nothaft explained.
The 10-year Treasury yield was 3.85% near midday — 43 BPS higher than last week, CNNMoney reported.
Just under half of the 100 mortgage bankers, mortgage brokers and other mortgage “experts” surveyed by Bankrate.com for the week Sept. 25 to Oct. 1 project further increases in mortgage rates during the next 35 to 45 days. Another 40% expect rates to fall, and 13% see rates staying within 2 BPS of their current levels.
The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 6.02%, according to Freddie’s survey, climbing 0.35% from the previous survey. The average 1-year ARM was 5.16%, up from 5.03%.
The index for the 1-year ARM, the 1-year Treasury yield, was 1.90% yesterday, climbing from 1.50% seven days earlier, according to data from the U.S. Department of the Treasury. The 6-month London Interbank Offered Rate, which is also used as an ARM index, was 3.47% yesterday, Bankrate.com reported. Last week, LIBOR was 3.02%.
ARM share in the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending Sept. 19 was unchanged from the prior week at 4%.
Overall applications fell 11% on a seasonally adjusted basis in MBA’s survey, leaving the Market Composite Index at 591.4. Purchase applications were down 10%, and refinance applications fell 11%. Just over half of applications were for refinances, the same share as last week.
Government loan applications, which MBA noted were largely FHA, fell 9%.