The 15-year fixed-rate mortgage was unchanged at 6.02 percent. The 5/1 adjustable-rate mortgage rose 3 basis points to 6.16 percent. The 1-year ARM fell a basis point, to 5.91 percent.
Mortgage rates were about the only thing that didn't change much from week to week. There was a hefty surge in mortgage applications, plus that teeter-totter with the October jobs report sitting on one end and the equally weighty election results sitting on the other.
Weekly national mortgage survey
Results of Bankrate.com's Nov. 8, 2006, weekly national survey of large lenders and the effect on monthly payments for a $165,000 loan:
5-year ARM
This week's rate: 6.16%
Change from last week: +0.03
Monthly payment: $1,006.29
Change from last week: +$3.20
15-year fixed
This week's rate: 6.02%
Change from last week: N/C
Monthly payment: $1,394.15
Change from last week: N/C
30-year fixed
This week's rate: 6.32% %
Change from last week: +0.01
Monthly payment: $1,023.46
Change from last week: +$1.08
Refi boomlet
According to the Mortgage Bankers Association, loan applications jumped 8.8 percent, led by a big increase in refinance applications. Almost half of mortgage applications were for refinances last week, and more than a quarter of applicants requested an adjustable-rate mortgage.
The surge in applications followed a big drop in mortgage rates the previous week, as refinancers and home buyers took advantage of what could turn out to be a temporary dip.
Bankrate.com conducts its mortgage rate survey every Wednesday. If you graph rates from Wednesday to Wednesday, with just those two points and no points between, rates look nearly flat. But if you graphed Treasury yields, you would see a hump.
Mortgage rates tend to move in the same direction as yields on 10-year Treasury notes. Treasury yields spiked Friday with the release of the October employment report, which had the jobless rate falling to 4.4 percent, a more-than-five-year low. More importantly, it showed that the economy has been creating jobs at a faster clip than previous estimates had indicated.
Wage report begets inflation fears
The employment report also showed that average weekly wages went up more than 0.6 percent in October, an annual rate of 7.8 percent. That portends higher inflation, and Treasury yields leapt as a result. The 10-year Treasury's yield rose 11 basis points Friday, finishing at 4.71 percent.
It stayed there Monday. But the 10-year yield fell 5 basis points Tuesday, right around the same time that the Democrats were winning control of the House. The 10-year yield fell a few basis points more on Wednesday.
Some analysts attributed the drop in yields to the prospect of a return to fiscal discipline in Washington, with the Democrats and Republicans curbing each others' taxing-and-spending excesses. Theoretically, smaller federal budget deficits would exert a downward push on interest rates and bond yields.
Not everyone was willing to reach that far. "It's hard for me to imagine that the election would have any long-lasting effect on yields in the marketplace," says Frank Nothaft, chief economist for mortgage financing giant Freddie Mac. |
