Adjustable-rate mortgages fell to new record lows, and fixed rates are likely to do the same in next week’s interest rate reports. Meanwhile, mortgage activity was softer this week, and the jumbo spread improved.
A single basis point higher than last week, the average 30-year fixed-rate mortgage was 4.24 in Freddie Mac’s survey of 125 financial institutions and mortgage lending companies for the week ended Thursday. The 30-year was 4.98 percent this week last year.
The spread between the conforming 30-year and the jumbo 30-year improved to 84 BPS from 90 BPS last week based on the Mortech-Mortgage Daily Mortgage Market Index report for the week ended Wednesday.
The U.S. Department of the Treasury reported that the yield on the 10-year Treasury fell to 2.53 percent Thursday from 2.69 percent the prior Thursday. The movement suggests that the conforming 30-year could fall 10 BPS or more in next week’s reports.
Less than half of the panelists surveyed by Bankrate.com for the week Nov. 4 to Nov. 10 projected that mortgage rates will move at least 3 BPS lower during the next week or so. One-third forecasted a rise and one-fifth saw no changes ahead.
The 15-year fixed rate fell to 3.63 percent from 3.66 percent in Freddie’s survey.
The five-year Treasury-indexed hybrid ARM averaged 3.39 percent, lower than 3.41 percent seven days earlier and the lowest level on record since Freddie began tracking it in 2005.
At 4 BPS lower than last week, the one-year Treasury-indexed ARM was a record-low 3.26 percent, Freddie said. The one-year was 4.47 percent one year ago.
The yield on the one-year Treasury, which is used as the index for the one-year ARM, closed today at 0.21 percent, higher than 0.18 percent a week earlier, based on the Treasury data. Bankrate.com reported that the six-month London Interbank Offered Rate — or LIBOR — was 0.45 percent Wednesday, unchanged again from the previous week.
The ARM share in the Mortgage Bankers Association’s survey of mortgage bankers, commercial banks and thrifts edged up to 5.4 percent last week from 5.3 percent one week prior.
New mortgage activity was lower this week based on the Mortgage Market Index, which was 288 versus 298 last week. The average U.S. loan amount eased to $212,501 from the previous week’s $212,726. Vermont’s $285,525 average was highest, while Nebraska’s $150,102 was lowest.
In MBA’s report, last week’s mortgage applications were down 5 percent on a seasonally adjusted basis from the previous week. Refinances were down 6 percent and purchases were up 1 percent.
The refinance share was mostly unchanged at 60 percent this week in the Mortech-Mortgage Daily report. The rate-term share was 45 percent and the cashout share was 15 percent.