After reaching the lowest levels on record, fixed mortgage rates rose. But improvements were reported for refinance activity, purchase applications and a popular adjustable-rate product.
The average 30-year fixed-rated mortgage jumped 10 basis points from last week’s all-time low to 4.81% in today’s survey of 125 thrifts, credit unions, commercial banks and mortgage lenders from Freddie Mac. The 30-year was 66 BPS better, however, than a year earlier.
Freddie’s chief economist, Frank Nothaft, explained that the increase followed “an upbeat employment report.”
The yield on the 10-year Treasury Note, a barometer for mortgage rates, was 3.482% during trading today, according to WSJ.com. The 10-year yield was 3.39% at the close of trading a week ago, based on U.S. Department of the Treasury data. The movement suggests rates might not be much different in Freddie’s next survey.
A majority of the panelists surveyed by Bankrate.com’s for the week Dec. 10 to Dec. 16 were more pessimistic, predicting mortgage rates will increase at least 3 BPS during the next 35 to 45 days. Another 29% foresaw no changes ahead, and 14% projected a decline.
Up a more moderate 5 BPS from last week’s record low, Freddie reported the average 15-year fixed-rate mortgage at 4.32%.
The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 7 BPS more than the prior week at 4.26%, according to Freddie.
The one-year Treasury-indexed ARM averaged 4.24%, better than last week by 1 basis point. The average one-year was 85 BPS better than the same week during 2008.
Serving as an index for the one-year ARM is the yield on the one-year Treasury, which closed yesterday at 0.31%, higher than 0.28% a week prior, Treasury data indicate. A widely used subprime ARM index, the yield on the six-month London Interbank Offered Rate — or LIBOR — was 0.47% yesterday, easing from 0.48% a week earlier, Bankrate.com reported.
Reflecting last week’s record-low fixed rates, ARM activity eased to 4.7% in the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ended Dec. 4 from 4.8% one week prior.
Refinance applications were 11 percent higher in MBA’s survey, pushing the refinance share to 74% from the previous week’s 72% and fueling a 9% increase in overall applications on a seasonally adjusted basis.
Purchase applications were up 4% on a seasonally adjusted basis in MBA’s survey and 42% higher on an unadjusted basis.
