Rates, Apps Worsen

At 6.03%, the average 30-year fixed-rate mortgage jumped 15 basis points from last week, Freddie Mac today reported in its latest Primary Mortgage Market Survey. The 30-year averaged 6.16% a year ago.

The 15-year fixed-rate mortgage averaged 5.62% during the latest week, climbing 22 BPS from seven days earlier, Freddie reported.

“Average rates on mortgages increased across the board this last week as the most recent economic data raised inflationary concerns in the capital markets,” Freddie’s Chief Economist Frank Nothaft said in the statement. “For example, the Producer Price Index — a measure of wholesale inflation — increased 1.1 percent in March, nearly double the consensus expectations.”

Fixed-rate mortgages tend to move with the 10-year Treasury yield, which was at 3.79% early today, according to data from CNNMoney. Last week the yield was 3.72%.

Nearly half of the 100 mortgage bankers, brokers and other “industry experts” surveyed by Bankrate.com for the week April 17 to April 23 project mortgage rates will increase at least 2 BPS during the next 35 to 45 days, while the rest were evenly split over whether rates will fall or stay where they are now.

Nothaft noted activity in March’s index of leading indicators suggests “a reduced likelihood of a substantial rate cut at the next Federal Open Market Committee meeting.”

The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 5.68% in Freddie’s latest survey, jumping 0.20% from the prior week.

The average one-year Treasury-indexed ARM was 5.29%, 19 BPS above the previous week, Freddie said. The 1-year Treasury itself yielded 1.83% yesterday, 18 BPS higher than a week earlier, according to U.S. Treasury Department data.

Another popular ARM index, the London Interbank Offered Rate, had a 3.04% yield yesterday, climbing from 2.72% the prior week, Bankrate.com reported. The LIBOR has risen for three consecutive weeks and is 66 BPS higher than a month ago.

ARMs accounted for 7% of the applications tracked by the Mortgage Bankers Association in its Weekly Mortgage Applications Survey for the week ending April 18. ARM share was 6% in the prior week.

MBA’s survey, which lags one week behind Freddie’s data, indicated 1003 loan applications fell 14% from the prior week, leaving the trade group’s seasonally-adjusted Market Composite Index at 637.6. On an unadjusted basis, the index was off 3% from a year earlier.

Seasonally-adjusted refinance applications fell 20% from the previous week, leaving the refinance share at 49% — lower than 54% seven days earlier, MBA said. Purchase applications were off 6%, while the decline in government applications was milder at 3%.

Sam Garcia worked in mortgage lending for twenty years prior to becoming publisher of MortgageDaily.com.

e-mail: mtgsam@aol.com