Despite an uptick in the underlying one-year Treasury note yield, the Monthly Treasury Average managed to set a new record. The index, which is used to determine payment adjustments on some home loans with variable rates, has fallen each month for nearly five years now.
February’s MTA was 0.15833 percent, according to an analysis of Federal Reserve data. Based on historical Treasury yields going back to 1953, last month’s index was the lowest on record.
A month earlier, MTA was 0.16917, while it stood at 0.30667 a year earlier.
The index first fell to a record-low in March 2009, when it was 1.43833 percent. It has been lower each month since April 2007, when it stood at 5.02917 percent.
February’s decline came even though the monthly average for the one-year Treasury note — which is used to calculate the index — climbed 4 basis points from January to 0.16 percent. The reason for the MTA’s decline was that the monthly Treasury yield hovered at or near 0.11 percent for six straight months — helping to drag down the average.
The yield on the one-year Treasury note, itself, closed Friday at 0.17 percent, according to the Department of the Treasury.
Both the MTA and the one-year Treasury serve as indices on adjustable-rate mortgages — determing rate adjustements for ARM borrowers.
ARMs accounted for 4.684 percent of all loan inquiries in the U.S. Mortgage Market Index from Mortech Inc. and Mortgage Daily for the week ended March 2.
