|
|
Mortgage rates continued lower as applications exploded.
The 30-year fixed-rate mortgage averaged 5.53% in Freddie Mac’s mortgage rate survey for the week ended Dec. 3. The 30-year was lower than 5.97% the prior week and 5.96% the prior year. The 30-year has fallen each week since Oct. 30, when it stood at 6.46%. The average 15-year fixed rate fell similarly, to 5.33% from 5.74% seven days earlier. “After Federal Reserve actions to increase liquidity in the mortgage market, interest rates for fixed-rate mortgages took a dive,” Freddie’s Chief Economist Frank Nothaft stated in the survey. “This week’s decline was the largest since the week of Nov. 27, 1981, and 30-year fixed-rate mortgage rates are now almost a full percentage point lower since the last week in October.” (Freddie originally reported “This week’s decline was the largest since the week of Oct. 23, 2008”) A gauge for fixed mortgage rates — the 10-year Treasury yield — was 2.657% early today, tumbling from 3.030% a week earlier and suggesting mortgage rates are headed even lower. The 10-year, which was unchanged in price today, was reacting to yesterday’s disclosure by the Wall Street Journal that the U.S. Treasury is floating a plan that would bring mortgage rates down to 4.5%. Survey respondents over at Bankrate.com for the week Dec. 4 to Dec.10 overwhelmingly indicated that mortgage rates are headed lower, with 62% projecting that rates would decrease by at least three basis points during the next 35 to 45 days. Less than one-third forecasted no change and 7% projected an increase. A more moderate decline was reported by Freddie in the five-year Treasury-indexed hybrid adjustable-rate mortgage, which averaged 5.77%. Last week, the five-year average was 5.86%. The one-year Treasury-indexed ARM averaged 5.02%, down from 5.18%. The underlying ARM index, the yield on the 1-year Treasury, closed at 0.70% yesterday, tumbling from 0.93% the previous week. The six-month London Interbank Offered Rate was 2.57% for the week ended Dec. 3. The prior week, LIBOR stood at 2.62%. Applications for ARMs represented just 1% of applications tracked in the Mortgage Bankers Association’s Mortgage Applications Survey for the week ended Nov. 28. ARM share was down from 3% the prior week. Overall 1003 applications more than doubled from the prior week on a seasonally adjusted basis, pushing MBA’s Market Composite Index to 857.7. The data was adjusted to account for Thanksgiving. More than 69% of applications were for refinances — which surged 203% from a week earlier. Purchase applications were up a more modest 38% and government applications were 39% higher. |
|
Â
|
|
Sam Garcia worked in mortgage lending for twenty years prior to becoming publisher of MortgageDaily.com. e-mail:Â mtgsam@aol.com |