Freddie Mac reported a plunge in mortgage rates in the week ending April 21 as Treasury yields dropped.
After four straight weeks of increases, the 30-year fixed mortgage fell 11 basis points to 4.80% with an average 0.7 point, its lowest level since mid-March. This places the no point rate just under 5% which is likely to stimulate refinancing activity.
Previously at this rate level, the Mortgage Bankers Association's Refinance Index was between 2200 and 2400. For the week ending April 15, the index stood at 1976.
Supply or prepayment impact from any increase, however, will remain minimal as activity is constrained by tight credit standards, burnout, and a lower universe of eligible borrowers.
The 15-year fixed mortgage rates also declined 11 basis points to 4.02%, one-year ARM rates were down nine basis points to 3.16%. Meanwhile, 5/1 hybrid ARMs plummeted 17 basis points to 3.61%. One-year ARM rates are at their lowest level for 2011, while the other terms are just four to five basis points above the lows experienced year-to-date.