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MTA Back in Record Territory

Rates

Following a one-month reprieve, the Monthly Treasury Average is again setting new records. But it’s not the only adjustable-rate mortgage index venturing into record territory.

Every month from September 2013, when MTA stood at 0.14333 percent, until August 2014, when it was 0.11500, the index established a new all-time low.

But that all came to a halt in September, when the index — which is utilized to determine rate and payment changes on some ARMs — didn’t move from August.

That changed in October when MTA declined to 0.11333 percent — the lowest level on record based on Federal Reserve Board data going back to 1953.

MTA was 0.13833 in October 2013.

The index is calculated based on the daily average of the one-year Treasury yield for each of the past 12 months. In October, the daily average was 0.10 percent.

Also recently establishing a new record low was the Cost of Funds Index — or COFI — which fell to 0.663 percent in September.

The yield on the one-year Treasury note, which is far more widely used than either MTA or COFI, was 0.11 percent as of the end of October, down from 0.13 percent at the end of the previous month, according to data from the Department of the Treasury..

The one-year Treasury yield has since retreated to 0.12 percent as of Monday.

ARM share was 10.78 percent in the U.S. Mortgage Market Index from LoanSifter/Optimal Blue and Mortgage Daily for the week ended Oct. 31.

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