Rates, Apps Edge Higher

At 6.40%, the 30-year fixed-rate mortgage average inched up 3 BPS from last week and a year ago, according to Freddie Mac’s Primary Mortgage Market Survey for the week ending today.

Half of the mortgage industry brokers, bankers and other individuals surveyed by Bankrate.com this week see rates staying relatively the same over the next 45 days, one-third forecast an upturn and the other 17 percent predicted a downfall.

Meanwhile, the National Association of Realtors’ October forecast has the 30-year averaging 6.4% this quarter and rising to 6.5% until the second quarter next year.

The 15-year averaged 6.06%, also 3 BPS above the level a week earlier, Freddie said.

Mortgage rates edged up after Friday’s release of the September employment figures reflected greater strength in the economy during that time than initially indicated, Freddie Chief Economist Frank Nothaft said in the announcement. This contributed to financial markets reassessing the likelihood that the Federal Open Market Committee will again cut the federal funds rate in the upcoming Oct. 31 meeting and now expect a 30 percent chance of this happening rather than a 50 percent chance.

The 10-year Treasury note yielded 4.68% near midday, up 3 BPS for the day but a whopping 16 BPS above the level last week.

Up 1 BPS to a reported 6.12% this week was the average for 5-year Treasury-indexed hybrid adjustable-rate mortgages.

The 1-year Treasury-indexed ARM average jumped 15 BPS over the past seven days to 5.73%, Freddie reported. The 1-year Treasury bill itself yielded 4.23% on Tuesday, also surging 13 BPS from a week earlier, Federal Reserve data showed.

Another popular ARM index, the 6-month London Interbank Offered Rate, was 5.21%, Bankrate.com reported yesterday. The LIBOR was up 5 BPS from a week earlier.

The ARM share of total mortgage application activity continued at nearly 14 percent during the week ending Oct. 5, the Mortgage Bankers Association reported on Wednesday.

Total mortgage application volume increased 2 percent from the previous week, MBA’s latest Weekly Mortgage Application Survey showed. The improvement reflected a 3 percent upturn in refinance requests and a 2 percent increase in demand for purchase money loans.

Refinance applications continued to account for 46 percent of total applications, MBA said.