Fixed mortgage rates stood their ground in record territory this week. Treasury market movements suggest rates could even be lower by the next report. Meanwhile, a criminal investigation is in process over the manipulation of an index used on adjustable-rate mortgages.
The Primary Mortgage Market Survey for the week ended June 28 had the 30-year fixed-rate mortgage averaging 3.66 percent, the same as last week, according to Freddie Mac. But the 30 year was considerably better than 4.51 percent in the week ended June 30, 2011.
Based on a sampling of 5,372 loans from 22 lenders, the Federal Housing Finance Agency reported average rates on 30-year fixed-rate mortgages fell 17 BPS from April to 4.04 percent last month. The rate was based on mortgages closed during the final week of the month. Home loans are typically locked in around 30 to 45 days before closing. All residential loans types had an average 3.78 percent rate in May, 15 basis point lower than in April.
An analysis of Treasury market activity indicates that mortgage rates will be about 5 BPS better in Freddie’s next report. The 10-year Treasury yield averaged 1.65 percent during the period when Freddie surveyed the 125 lenders for its latest report, while the 10-year yield closed at 1.60 percent Thursday, data from the Department of the Treasury showed.
But only 24 percent of Bankrate.com panelists for the week June 28 through July 4 see lower rates ahead. The rest were evenly split about whether rates would increase or stay within 2 BPS of their current levels.
The premium for a jumbo mortgage was 73 BPS in the U.S. Mortgage Market Index report from Mortech Inc. and Mortgage Daily for the week ended June 22. The conforming-jumbo spread was 70 BPS a week earlier and only 43 BPS a year earlier.
A new record was reported by Freddie for the 15-year fixed-rate mortgage:Â 2.94 percent. A week prior, the 15 year averaged 2.95 percent. A 72-basis-point discount for 15-year mortgages was slightly better than the 71-basis-point discount over 30-year loans last week.
Freddie said five-year, Treasury-indexed, hybrid ARMs increased 2 BPS during the past seven days to 2.79 percent.
No change was reported by Freddie for the one-year Treasury-indexed ARM, though at 2.74 percent the one year was down 23 BPS from the same week in 2011. But there was a change in the underlying one-year Treasury yield, which jumped to 0.22 percent today from 0.19 percent a week earlier based on Treasury Department data.
Another ARM index, the six-month London Interbank Offered Rate, decreased by 1 basis point during the last week to 0.73 percent as of Wednesday, BankRate.com reported.
LIBORÂ was manipulated between 2005 and 2009 by Barclays Bank PLC, which admitted to misconduct related to submissions for LIBOR and the Euro Interbank Offered Rate, the U.S. Department of Justice announced Wednesday. The submissions were false at times “because they improperly took into account the trading positions of its derivative traders, or reputational concerns about negative media attention relating to its LIBOR submissions.”
A criminal investigation into LIBOR and EURIBOR manipulation by other financial institutions and individuals is ongoing, according to the Justice Department.
