Freddie Mac reported new records set along 30- and 15-year fixed mortgage rates as well as on one-year ARMs in the week ending Nov. 14.
The 30-year fixed mortgage rates declined six basis points to 3.34%, two basis points below the previous low set in early October. This should keep refinancing activity firm.
Yesterday, the Mortgage Bankers Association reported a 13% jump in its Refinance Index, albeit some of the gain was due to a rebound in application activity from those states impacted by Superstorm Sandy.
The 15-year fixed and one-year ARM rates both declined four basis points to 2.65% and 2.55%, while 5/1 hybrid ARMs rose a basis point to 2.74%.
In its Refinance Product Transition Report for 3Q12 released earlier this week, Freddie Mac said that 95% of refinancing borrowers chose a fixed-rate loan. For those refinancing from a hybrid ARM, 82% chose a fixed-rate with only 18% going back into a hybrid. From a one-year ARM, 81% chose fixed with the remaining 19% taking a hybrid ARM.
Also, 29% of borrowers that refinanced shortened their loan term and 68% kept the same term as the loan that was paid of. Meanwhile, 3% lengthened their term.