5/1 Rate Tumbles

The average for the 30-year fixed-rate mortgage came in at 5.71%, down six basis points from a week ago and way below the 6.30% a year ago, according to Freddie Mac’s latest weekly survey of 125 mortgage lending thrifts, commercial banks and companies.

Prior to the uptick reported last week, the 30-year average had decreased five consecutive weeks, falling 29 BPS during the period, and now stands at its lowest point since the week ending Feb. 24.

The 15-year averaged 5.27%, also down six BPS from a week ago, Freddie said.

In afternoon trading, the 10-year Treasury note, which influences long-term mortgage rates, yielded 4.10% — much lower than 4.21% last Thursday afternoon — and was priced 100.19, above the 98.28 a week ago.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage average was reportedly 5.07% — plunging 14 BPS from last week.

“It is remarkable how mortgage rates have remained so low for so long,” commented Freddie chief economist Frank Nothaft in the announcement. “But as long as inflation is held in check, there is little or no pressure to push mortgage rates higher. And at the moment, despite high fuel prices, core inflation does indeed seem to be a nonevent.”

None of the 100 mortgage “experts” surveyed by Bankrate.com this week foresaw a decline in rates over the next 35 to 45 days. The majority (60%) believed rates will remain about the same and the rest (40%) predicted that rates will rise.

The average for the 1-year Treasury-indexed ARM was the only one that continued to ascend, edging up three BPS during the past week to 4.26%, according to the survey announcement.

The 1-year constant maturity Treasury index, also referred to as the 1-year Treasury Bill, was 3.35% for the week ending May 13, up two BPS from the previous week, according to the Federal Reserve Statistical Release. The 1-Year index is reportedly used roughly on half of all ARMs.

Despite that rates are “so low,” loan originators collected fewer 1003s — as reflected in the 11% drop from the previous week to 699.2 in the Market Composite Index reported by the Mortgage Bankers Association. The decline was due to purchase money requests sinking 11% from the prior week’s record level and refinance application activity dropping 10%.

The refi share of applications at 39%, however, did not fall from the previous week. Meanwhile, the ARM share of activity edged down to 34%, MBA said.