Mortgage Daily Logo

Record Rates Likely to Escalate


The lowest mortgage rates since the 1950’s will probably be higher in next week’s reports. Business has accelerated at both mortgage broker shops and mortgage banking firms as refinance activity has been reinvigorated. But a steep decline in first-quarter refinances is projected.

The latest record to be shattered was the 30-year fixed-rate mortgage, which averaged 4.19 percent in Freddie Mac’s Primary Mortgage Market Survey for the week ended Thursday. It was the lowest level recorded by Freddie and the lowest level since 1948 based on a data series of FHA rates dating back to 1948. The 30-year was 4.27 percent a week earlier and 4.92 percent a year earlier.

The 30-year will average 4.4 percent this quarter, the same as it averaged in the third quarter, Freddie predicted in its October outlook. The 30-year will edge up to 4.5 percent in the first-quarter 2010.

The Mortech-Mortgage Daily Mortgage Market Index report for the week ended Oct. 13 indicated that the spread between the jumbo 30-year mortgage and the conventional 30-year widened to 95 basis points from the previous week’s 92 BPS.

While the 30-year mortgage rate was down 8 BPS from last week, the yield on the 10-year Treasury note jumped 11 BPS from last Thursday to close at 2.52 percent today, according to data published by the U.S. Department of the Treasury. The disparate movement suggests the 30-year fixed-rate mortgage could rise as many as 19 BPS in next week’s reports.

The majority of panelists surveyed by for the week Oct. 14 to Oct. 20 expected mortgage rates will not move more than 2 BPS during the next week or so. But 29 percent forecasted a rise and 12 percent predicted a decline.

The 15-year also set a record in Freddie’s survey, falling from 3.72 percent last week to 3.62 percent.

It was the third consecutive week that fixed-rates were at all-time lows.

There was no change in the five-year Treasury-indexed adjustable-rate mortgage, which averaged 3.47 percent in Freddie’s report. Still, it was the lowest level on record with Freddie.

The one-year Treasury-indexed ARM broke no records, though. The one-year averaged 3.43 percent in Freddie’s survey, 3 basis points higher than last week but 117 BPS lower than the same week in 2009. Freddie projects that the one-year will average 3.5 percent in the fourth quarter then rise to 3.6 percent.

The underlying index for the one-year ARM, the yield on the one-year Treasury, fell 1 basis point from last week to 0.22 percent today, the Treasury reported.

It was the second week of no movement for the six-month London Interbank Offered Rate, which was 0.46 percent Wednesday based on rates reported by LIBOR is widely used on many outstanding subprime ARMs.

The Mortgage Bankers Association reported that ARM share fell to 5.4 percent in its survey for the week ended Oct. 8 from the prior week’s 6.1 percent. Freddie’s outlook had ARM share at 6 percent during the final three quarters of 2010 then increasing to 7 percent.

New mortgage broker activity this week was 11 higher, according to the Mortgage Market Index. The average U.S. loan amount rose to $222,567 from the previous week’s $214,657. Hawaii’s $287,943 average loan amount was highest, while North Dakota’s $136,575 was lowest.

MBA’s report indicated that last week’s applications taken by mortgage bankers rose 15 percent on a seasonally adjusted basis from a week earlier. Refinance activity was 21 percent higher and purchase business rose 9 percent.

Refinance share expanded to 63 percent this week from 59 percent last week in the report. This week’s share included a 49 percent rate-term share and a 14 percent cashout share.

Freddie projected refinance share of applications, which was 80 percent in the third-quarter, will ease to 70 percent this quarter and drop to 55 percent in the first quarter of next year.

Related Posts

Mortgage Rates Up 92 BPS From Year Ago

Mortgage Rates Up 92 BPS From Year Ago

Mortgage Rates Up 92 BPS From Year Ago Weekly interest rates might continue holding Oct. 25, 2018 By SAM GARCIA Mortgage Daily Over the past year, weekly fixed interest rates on single-family loans have soared 92 basis points. But little change was reported from last...

Mortgage Rates Up 92 BPS From Year Ago

Mortgage Rates Up 92 BPS From Year Ago

Over the past year, weekly fixed interest rates on single-family loans have soared 92 basis points. But little change was reported from last week, and more of the same is expected. On conventional loans utilized to finance a home purchase with amounts up to the...

Mortgage Rates Up 92 BPS From Year Ago

Mortgage Rate Forecasts Have Little Change Ahead

Thirty-year mortgage rates moved lower this past week and this past month. Short- and long-term forecasts have little movement ahead for mortgage rates. Ellie Mae Inc.'s Origination Insight Report | September 2018 indicated that average 30-year note rates on...

Mortgage Rates Up 92 BPS From Year Ago

Mortgage Rates Soar, Could Sink in Next Report

An expected surge in mortgage rates came to fruition this week. The latest forecast has fixed rates tumbling in next week's report. A new index for adjustable-rate mortgages moved lower. A stunning 19-basis-point surge from the preceding week left average 30-year...

Mortgage Rates Up 92 BPS From Year Ago

Mortgage Rates Dip, But Likely to Skyrocket

Mortgage rates retreated a modest amount just one week after climbing to a seven-year high. The next rate report, however, is likely to reflect significant escalation. Prospective 30-year borrowers using the LendingTree network during September were offered an average...

Popular posts

How Long Does It Take to Refinance a Mortgage
How Long Does It Take to Refinance a Mortgage

So, you’re interested in refinancing your mortgage. Maybe you want some extra capital to do that home project you’ve always dreamed of, interest rates are nearing record lows, or you want to start consolidating debt. Regardless of the motivation behind the refinance,...

How Does Refinancing a Mortgage Work
How Does Refinancing a Mortgage Work

A home purchase is considered an investment, and a robust one at that. Savvy owners are constantly looking for new ways to reduce debt, save money, pay less in interest, and ultimately build equity. Refinancing is one way to leverage your investment and do just that....

What Does It Mean to Refinance Your Home
What Does It Mean to Refinance Your Home

You can think of refinancing your mortgage as a debt redo. Essentially, you’ll swap out the existing loan for a new one - ideally with better terms and conditions. Only this time it could help you save money on high mortgage payments, rather than just borrow it....

Setting up the Utilities in My New House
Setting up the Utilities in My New House

All the tedious, time-consuming home closing documents have been signed, sealed, and delivered. Your belongings are packed into what seems like a million boxes and you have a solid plan to haul all your existing furniture to the new place. Just as your boxes and...

When Is My First Mortgage Payment Due?
When Is My First Mortgage Payment Due?

Navigating your way through a brand new mortgage loan can be a difficult task, especially for first time homeowners. After handing over a large sum of money for the down payment and closing costs, it’s important to pay attention to the timing of your first mortgage...


Don’t worry, we don’t spam

calculate your monthly mortgage payment

Related Topics

Helpful Links

Daily mortgage rate trends

Best mortgage lenders

First-time homebuyers programs by state

Loan limits by state

Types of mortgages

APR vs interest rate

Understanding PMI