Demand for adjustable-rate mortgages has almost disappeared as long-term fixed-rate mortgages continue to be cheaper than ARM loans for the first time in 25 years of recordkeeping by Freddie Mac.

The 30-year fixed-rate mortgage (FRM) averaged 4.8 percent with an average 0.7 point for the week ending April 23, down from 4.82 percent last week and 6.03 percent a year ago, Freddie Mac said in releasing the results of its weekly rate survey.

One-year Treasury-indexed adjustable-rate mortgages (ARMs) averaged 4.82 percent this week with an average 0.4 point, down from 4.91 percent last week and 5.29 percent a week ago.

While long-term rates have been dropping for some time -- reducing much of the advantage ARM loans might have once held for borrowers -- it's perhaps unprecedented for rates on fixed-rate mortgages to be lower than ARM loans.

This is the second week in a row that rates on 30-year fixed-rate mortgages were lower than those for 1-year ARMs -- the first time that's happened since Freddie Mac started collecting data on ARMs in 1984.

The 15-year FRM averaged 4.48 percent with an average 0.7 point, unchanged from a week ago but down from 5.62 percent a year ago, and the lowest since Freddie Mac began tracking the 15-year FRM in August 1991.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 4.85 percent with an average 0.6 point, down from 4.88 percent last week and 5.68 percent a year ago. It's the lowest rate on 5-year ARMs since Freddie Mac began tracking it in January 2005.

Last week, only 1.4 percent of mortgage applications were for ARM loans, compared with 6.6 percent the same week a year ago, 18.3 percent two years ago, 28.2 percent three years ago, and 35.4 percent four years ago, according to weekly surveys by the Mortgage Bankers Association.

The MBA is forecasting that mortgage originations will hit $2.78 trillion this year, a 39 percent increase from last year and the fourth-highest year on record, as borrowers rush to refinance to take advantage of low interest rates.

The MBA expects about seven out of 10 mortgages originated this year will be refinancings, rather than purchase loans, compared to what's been closer to a 50-50 split in more recent (see story) years.

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