A new 15-year fixed-rate record was set, while the 30-year fixed-rate mortgage matched its previous low. But fewer borrowers are taking advantage of the record-low rates. A big improvement in jumbo rates trimmed the jumbo-conventional spread.
Falling to 4.32 percent, the average 30-year fixed-rate mortgage again reached the lowest level ever recorded by Freddie Mac. The 30-year was 4.37 percent last week and 4.94 percent a year ago.
Freddie’s regulator, the Federal Housing Finance Agency, reported that the 30-year averaged 4.70 percent in August, 14 BPS better than July.
In the Mortgage Market Index report for the week ended Sept. 29, the jumbo 30-year dropped 10Â BPS to 5.23 percent, while the conventional 30-year was down just 6 BPS. The resulting jumbo-conventional spread was cut to 95 BPS from 98 BPS last week.
The yield on the 10-year Treasury bond, a benchmark for fixed mortgage rates, moved 3 BPSÂ lower than last Thursday to close today at 2.53 percent, according to data from the U.S. Department of the Treasury. This week’s movement offers little insight into where mortgage rates might land in next week’s reports.
Based on 63 percent of the panelists surveyed by Bankrate.com for the week Sept. 30 to Oct. 6, mortgage rates are likely to stay within 2 BPS of their current levels for the next week or so. An increase was forecasted by 21 percent, and a decline was predicted by the rest.
It was a new record low for the 15-year fixed-rate mortgage, which Freddie reported at 3.75 percent. The 15-year was 3.82 percent seven days earlier. FHFAÂ said the 15 year was 4.46 percent last month, falling 20 BPSÂ from July.
Falling confidence in the economy among businesses and consumers drove the decline in fixed mortgage rates this week, Frank Nothaft, chief economist at Freddie, said in the report.
The five-year Treasury-indexed adjustable-rate mortgage was 2 basis points lower this week at 3.52 percent, Freddie said.
According to Freddie’s survey, the one-year Treasury-indexed ARM averaged 3.48 percent — 2 BPS higher than last week. The one-year was 101 BPS better, however, than a year ago. The underlying yield, the one-year Treasury bill, climbed to 0.27 percent from 0.25 percent a week earlier, according to the Treasury Department.
The six-month London Interbank Offered Rate, or LIBOR, was 0.46 percent as of Wednesday, slightly lower than 0.47 percent last Wednesday. The index is used on many subprime ARMs.
Last week, when fixed rates were unmoved and the one-year ARM was up 6 BPS, the share of loan applicants who opted for an ARMÂ rose to 6.0 percent from 5.9 percent a week earlier, the Mortgage Bankers Association reported in its survey for the week ended Sept. 24.
Record rates weren’t enough to rally prospective borrowers, with the Mortech-Mortgage Daily Mortgage Market Index falling to 284 from 295 last week. The index reflects the volume of pricing inquiries per Mortech Inc. user.
The Mortech-Mortgage Daily report indicated that the average U.S. loan amount edged up to $212,512 from $212,052. The highest average was Washington, D.C.’s, $276,346, and the lowest average was $146,488 in Nebraska.
Refinances represented 58 percent of activity in the Mortgage Market Index report, lower than 60 percent a week ago. The rate-term share was 43 percent, and the cashout share was 15 percent.
