Adjustable Rates Rise as 30-year Declines

The 30-year fixed-rate mortgage averaged 6.24%, down 2 basis points from a week ago but 45 BPS higher than a year earlier, according to Freddie Mac’s latest survey of 125 mortgage-lending companies, thrifts and commercial banks.

The 15-year was unchanged from last week’s average of 5.89%, Freddie said.

The 10-year Treasury note yielded 4.63% at Thursday’s close, 8 BPS higher than reported a week ago. For just the day, there was an increase of 7 BPS in the 10-year note , which put its level closer to the 2-year Treasury note’s level of 4.72% and helped the inverted yield curve flatten out somewhat.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage reportedly averaged 5.97%, only 1 BPS above last week.

Up 2 BPS from a week earlier, Freddie said the average for the 1-year Treasury-indexed ARM came in at 5.34%. There was a bigger change, however, in the 1-year Treasury bill itself, as it rose 5 BPS from the prior week to 4.74% Wednesday, according to data from the Federal Reserve.

The varied action with different mortgage rates came as data indicating that manufacturing activity strengthened in February offset news that consumer confidence slipped to the lowest reading in three months, Freddie suggested.

“Over the past five weeks, mortgage rates have remained within a narrow range of 0.1 percentage points around this week’s averages,” Freddie Chief Economist Frank Nothaft said in a written statement. But, our “forecast calls for rates on 30-year fixed-rate mortgages to increase about one-quarter of a percentage point by the end of the year.”

In the short run, over the next 35 to 45 days, two-thirds of the 100 mortgage “expert” panelists surveyed by Bankrate.com believe mortgage rates will rise, and the rest believe rates will remain relatively unchanged.

Weekly mortgage application activity was almost unchanged, the Mortgage Bankers Association reported, and the refinance share remained at 38%, MBA said

ARM share reportedly nudged down to 28%.