VA Rates Lowest, ARM Share On Decline

By Sam Garcia

As monthly fixed rates on home loans have been tumbling, the share of new borrowers who opted for an adjustable-rate mortgage has thinned and is likely dropping during the current month. Loans to veterans continued to have the lowest interest rates.

Average 30-year note rates on residential loans that were closed during May were 4.52 percent, Ellie Mae reported. Rates fell 9 basis points from a month earlier and plunged 32 BPS from a year earlier.

A look at Freddie Mac’s weekly Primary Mortgage Market Survey data indicates that the next report from Ellie will reflect a 30-year note rate of around 4.27 percent.

Impacting interest rates as of late are potential rate cut by the Federal Reserve, trade tensions with China and Mexico, and a potential military conflict with Iran.

Average rates on loans guaranteed by the Department of Veterans Affairs were 4.31 percent — the lowest of the three types tracked by Ellie. Conventional rates averaged 4.52 percent, and FHA rates were highest at 4.63 percent.

Ellie said ARM share thinned to 6.7 percent last month from 6.8 percent in April. The share had been as wide as 9.2 percent in December 2018, when the average 30-year rate was 5.17 percent. With the 25-basis-point tumble in rates that is possible this month, ARM share probably will be even thinner in Ellie’s next report. The last time the 30-year note rate was 4.27 percent, in November 2017, ARM share was just 5.6 percent.

June 20, 2019


Sam Garcia

Sam Garcia is a 20-year mortgage news veteran who founded Mortgage Daily and served as its editor for two decades. Reach Sam at