Low Short-Term Yields Behind Record Low MTA

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MORTGAGE EXPERT
1 · 02 · 14

Yields on short-term Treasury bonds hung low last month — low enough for the Monthly Treasury Average to establish, yet another, record.

MTA, which has regularly been establishing new record lows recently, was 0.11500 percent in August. Based on the oldest available data back to 1953, it was the lowest on record.

MTA is used as an index on some adjustable-rate mortgages to determine changes to interest rates and monthly payments.

The index was 0.11667 percent a month earlier and 0.14917 percent a year earlier.

MTA is calculated based on the daily average for the one-year Treasury yield for each of the most recent 12 months. In August, the daily average was 0.11 percent, unchanged from July, the Federal Reserve reported.

The index on the much more widely used one-year ARM, the one-year Treasury yield, sank from 0.12 percent at the end of July to 0.09 percent at the end of August, the Department of the Treasury reported. The one-year yield closed Tuesday at 0.10 percent.

ARM share was 11.5 percent in the U.S. Mortgage Market Index report from LoanSifter/Optimal Blue and Mortgage Daily for the week ended Aug. 29, widening from 11.0 percent seven days earlier.

Mortgage Expert

Mortgage Daily Staff

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