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| Even as short-term Treasury yields climb, the month Treasury average continues to fall.The MTA was 1.51333% during February, according to data published by the Federal Reserve. The index fell from 1.63250 in January and 4.07583 in February 2008.
Last month was the 22nd consecutive month that the MTA was lower. The last time the index was this low was July 2004, when it stood at 1.46250%. The MTA is calculated by first averaging the daily yields on the one-year Treasury for a given month. In the second step, the average daily yield for each of 12 consecutive months is averaged. The latest average included March 2008 through February 2009. February’s average daily Treasury yield was 0.62% — higher than 0.44% in January and likely indicating an end to the MTA’s decline soon. The MTA is used as an index for adjustable-rate mortgages. Another ARM index, the cost of funds index, fell to 2.455% in January — its lowest level since March 2005 — according to the Federal Home Loan Bank of San Francisco. The yield on the 1-year Treasury stood at 0.72% on Friday — jumping from 0.51% at the end of January. Applications for ARMs accounted for less than 2% of all activity reported by the Mortgage Bankers Association for the week ending Feb. 20. |
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