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| Mortgage rates tumbled over the holidays, and may be headed lower. But mortgage applications, especially 1003s for refinances, were weaker.
The 30-year fixed-rate averaged 6.07%, according to Freddie Mac’s survey of 125 thrifts, commercial banks and mortgage lending companies for the week ending Jan. 3. The 30-year fell 10 basis points from the prior week and 11 BPS from a year earlier. The average 15-year fixed-rate mortgage was 5.68%, down from last week’s 5.79%, Freddie said. The 10-year Treasury-yield, which is tracked closely by fixed mortgage rates, was 3.93% early today, according to data from CNNMoney. A week ago, the 10-year yielded 4.23%. Frank Nothaft, Freddie’s chief economist, explained in this week’s survey that while a weak Institute for Supply Management’s index of manufacturing activity report reflected significant contraction in that sector, a Conference Board report indicated consumer confidence rose for the first time in five months during December, with a positive outlook for the next six months. In addition, new home sales in November were the lowest since April 1995 even as existing home sale edged higher. Based on the mortgage bankers, mortgage brokers and others in the mortgage industry surveyed by Bankrate.com this past week, no conclusions can be drawn on the direction of mortgage rates over the next month-and-a-half — with 42% predicting an increase, one-third forecasting no change and one-quarter expecting a decline. The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 5.78%, according to Freddie’s survey, falling 12 BPS from a week earlier. The 1-year Treasury-indexed ARM average was 5.47%, down just 6 BPS from the prior week, Freddie said. The 1-year Treasury bill itself yielded 3.17% yesterday, tumbling about 32 BPS from a week earlier. Another ARM index, the 6-month London Interbank Offered Rate, was 4.60%, according to Bankrate.com as of yesterday. LIBOR was 4.72% the prior week. ARMs accounted for just under 10% of total applications tracked by the Mortgage Bankers Association in its survey of mortgage bankers, commercial banks and thrifts for the week ending Dec. 28, nudging down from a week prior. MBA said overall applications in its latest survey, seasonally adjusted to account for the Christmas holiday, were down 12% from a week earlier. Driving the decline was a 15% decrease in refinance applications, though purchase applications were down 9%. The share of applications for refinances fell to 51% from 53% the prior week, MBA reported. |
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Sam Garcia worked in mortgage lending for twenty years prior to becoming publisher of MortgageDaily.com. e-mail:Â mtgsam@aol.com |
