There was little action with mortgage rates this week, though they could be lower by next week’s report.
Just a one-basis-point rise from last week was recorded for the 30-year fixed-rate mortgage, which averaged 4.40 percent in Freddie Mac’s Primary Mortgage Market Survey for the week ended Aug. 8.
During the same week last year, the secondary mortgage lender reported that the 30-year mortgage averaged 3.59 percent.
A mixed employment report left mortgage rates with little direction, Freddie Mac Chief Economist Frank Nothaft noted in the report.
“Even though the unemployment rate fell to 7.4 percent in July, which was the lowest since December 2008, the economy added only 161,000 jobs, short of the market consensus forecast,” Nothaft elaborated. “In addition, revisions subtracted 26,000 workers in the prior two months. Finally, hourly wages fell 0.1 percent in July, representing the first decline since October 2012.”
Mortgage Daily’s analysis of this week’s Treasury market activity indicates that 30-year rates could be around 7 BPS better in the next report.
The Department of the Treasury reported that the 10-year Treasury note yield averaged 2.65 percent during the days that Freddie surveyed primary lenders this week. But the yield tumbled to 2.58 percent on Thursday.
A majority of panelists surveyed by Bankrate.com for the week Aug. 8 to Aug. 14 predicted that mortgage rates won’t move more than 3 BPS over the next week. A third of the group forecasted a decline, and just 8 percent expect an increase.
The spread between jumbo mortgages and conforming loans jumped to 28 BPS in the U.S. Mortgage Market Index report from LoanSifter and Mortgage Daily for the week ended Aug. 2 from 23 BPS in the prior report.
No change from the week ended Aug. 1 left the 15-year fixed-rate mortgages averaging 3.43 percent in Freddie’s report. Fifteen-year mortgages were priced at a 97-basis-point discount to 30-year loans, better than the 96-basis-point spread in the previous report.
Freddie reported that the five-year, Treasury-indexed, hybrid, adjustable-rate mortgage averaged 3.19 percent in the latest survey, a basis point more than in the previous week.
A two-basis-point decline from seven days earlier left the one-year Treasury-indexed ARM averaging 2.62 percent in Freddie’s survey. One-year ARMs have fallen 3Â BPS from the week ended Aug. 9, 2012.
One-year ARMs move with the yield on the one-year Treasury note, which slipped to 0.12 percent today from 0.13 percent a week ago, according to the Treasury Department.
Another ARM index, the six-month London Interbank Offered Rate, was reported by Bankrate.com at 0.40 percent as of Wednesday, the same as a week earlier.
The latest Mortgage Market Index report indicated that ARMs accounted for 9.2 percent of all activity, slightly wider than the 9.1 percent ARM share one week prior.
