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| The long-term mortgage average was stuck in a time warp this week, and the forecast is more of the same. But adjustable-rate activity heated up.
The 30-year fixed-rate mortgage averaged 6.24%, unchanged from both a week ago and a year ago, Freddie Mac said its latest survey of 125 mortgage-lending thrifts, commercial banks and thrifts showed. “Higher productivity growth in the third quarter coupled with a larger-than-expected decline in consumer confidence in November sent mixed signals to the current state of the economy,” Freddie Chief Economist Frank Nothaft said in the announcement. “As a result, there were no definite upward or downward pressures on mortgage rates this week.” Rates have hit a plateau from here until the end of the year, according to 59 of the 100 mortgage industry panelists surveyed by Bankrate.com this week. Only a quarter forecast a downturn and the rest see rates rising in that time frame. Freddie’s November forecast has the 30-year averaging 6.4% this quarter and rising to 6.5% until the second quarter next year. A month earlier, Freddie saw the average reaching 6.5% as early as next quarter. The 15-year slipped 2 basis points from last week to 5.88%, Freddie said. Although the spread between 30-year and 15-year fixed-rate mortgages did not move significantly in the third quarter, the share of borrowers originally in a 15-year who refinanced into a 30-year was 58 percent– the highest percentage since the start of the quarterly series in 2002, Freddie announced its latest Refinance Product Transition Report showed. The estimates come from a sample of properties on which Freddie funded at least two successive loans. The 10-year Treasury note yield was at 4.15% late today, down 11 BPS from a week ago. Climbing 7 BPS from a week earlier, the 5-year Treasury-indexed hybrid adjustable-rate mortgage was reported at 5.96%. Unchanged from a week ago, the 1-year Treasury-indexed ARM averaged 5.50%, Freddie reported. But the yield on the 1-year Treasury bill itself fell 6 BPS during the prior seven days to 3.65% Wednesday, according to Federal Reserve data. The 6-month London Interbank Offered Rate averaged 4.74% in the week ending Wednesday, plunging 11 BPS from the previous week, Bankrate.com reported. During the third quarter, 85 percent of borrowers who originally had a 1-year ARM and 82 percent of originally hybrid ARM borrowers refinanced into a new fixed-rate mortgage, respectively off from the second quarter’s figures of 86 percent and 85 percent, Freddie’s refinance report said. Overall, more ARM and fixed-rate borrowers refinanced into a 30-year than in the second quarter, but fewer borrowers originally with a balloon mortgage switched into a 30-year fixed, Freddie reported. For the week ending Nov. 9, the ARM share of total mortgage application activity increased to nearly 16% from 14% a week earlier, according to the Mortgage Bankers Association’s latest application survey. Volume for 1003s jumped 6 percent from a week earlier, reflecting a 6 percent boost in refinance requests and 5% upturn in purchase money demand, MBA reported. The share of applications that was for refinance edged up from the prior week to just over half, MBA said. |
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