Mortgage Daily Logo

Record Low Rates Drive Increase in Business

Rates

Fixed rates fell to record lows — pushing new mortgage activity higher. But fixed rates might be higher in next week’s reports.

Declining to a new record low, the average 30-year fixed-rate mortgage was 4.17 percent in Freddie Mac’s Primary Mortgage Market Survey for the week ended Thursday. The 30-year was 4.24 percent a week earlier and 4.91 percent a year earlier.

Freddie’s chief economist, Frank Nothaft, attributed the improvement to the Federal Reserve’s third policy announcement that it will purchase up to $600 billion in government securities.

But the 30-year will likely be higher in next week’s reports based on the 10-year Treasury yield. The U.S. Department of the Treasury reported that the 10-year yield closed at 2.65 percent Wednesday, down from last week by just 2 BPS versus the 7-basis-point drop in the 30-year mortgage.

The spread between fixed rates on jumbo mortgages and conforming mortgages worsened to 89 basis points this week from 84 BPS in the Mortech-Mortgage Daily Mortgage Market Index report for the week ended Wednesday.

Half of the panelists surveyed by Bankrate.com for the week Nov. 11 to Nov. 18 predicted that mortgage rates will increase at least 3 BPS during the next week or so. A decline was forecasted by 29 percent, and no change was expected by 21 percent.

Also reaching a record-low was the average 15-year fixed-rate mortgage, which Freddie said fell to 3.57 percent from last week’s average of 3.63 percent.

Even the five-year hybrid Treasury-indexed adjustable-rate mortgage reached a new record-low: 3.25 percent. Freddie said the five-year was 3.39 percent seven days earlier.

But there was no change from last week for the one-year Treasury-indexed ARM, which Freddie reported at 3.26 percent. The one-year averaged 4.46 percent during the same week last year. The index on the one-year, the yield on the one-year Treasury, closed at 0.24 percent Wednesday, 2 BPS higher than last Wednesday, the Treasury reported.

A different ARM index, the six-month LIBOR, was 0.45 percent this week and has been unchanged since Oct. 20, Bankrate.com reported.

Last week, when the one-year ARM fell to its lowest level on record and the 30-year fixed rate rose, ARM share was trimmed to 5.3 percent from 5.4 percent a week earlier, according to the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ended Nov. 5.

New mortgage activity rose this week, with the Mortgage Market Index increasing to 311 from last week’s 288. Refinances drove the improvement, with the refinance share increasing to 61 percent this week from 60 percent. This week’s share reflected a rate-term share of 46 percent and a cashout share of 15 percent.

The average U.S. loan amount in this week’s Mortech-Mortgage Daily report increased to $214,267 from $212,501 last Wednesday. Alaska’s $295,095 average was highest, while Nebraska’s $151,977 was the smallest average.

Related Posts

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...

Mortgage Rates Up 92 BPS From Year Ago

Mortgage Rates Little Changed, More of Same Ahead

Over the past week, there was little change in interest rates on home loans. During the next week, more of the same is likely. Recently rising rates have helped the Federal Home Loan Banks' earnings. Conventional mortgages with conforming loan amounts used to finance...

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 paperwork has 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 furniture need to...

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...

Newsletter

Don’t worry, we don’t spam