Fixed mortgage rates lingered near record lows, while adjustable rates set new records. But it looks like rates could be higher in next week’s reports as the stock market enjoyed a major rally this week.
It was another small change for the 30-year mortgage, which Freddie Mac reported was 4.00 percent this week, inching up from 3.98 percent in the previous Primary Mortgage Market Survey. The 30 year has lingered within 2 basis points of 4.00 percent for five consecutive weeks now. A year prior, the 30-year mortgage averaged 4.46 percent.
But it looks like mortgage rates could rise around 10 BPS by the time Freddie releases its next survey based on Treasury market activity. The 10-year Treasury yield closed Thursday at 2.11 percent, according to data reported by the Department of the Treasury. Freddie surveys 125 lenders on Monday, Tuesday and Wednesday — and the 10-year yield averaged 2.02 percent during those three days.
The increase in the 10-year yield came as the stock market soared this week, with the Dow Jones Industrial Average surging around 800 points from last week.
An equal share of panelists surveyed by Bankrate.com for the week Dec. 1 to Dec. 7 — 46 percent — each predicted that mortgage rates would either move up 3 BPS or remain unchanged. Just 8 percent foresaw lower rates ahead.
Borrowers shopping for a jumbo mortgage were quoted a premium of 68 BPS over conforming borrowers, based on the U.S. Mortgage Market Index report from Mortech Inc. and MortgageDaily.com for the week ended Nov. 25. The conforming-jumbo spread leapt from 0.60 percent the previous week.
Freddie’s survey indicated that the 15-year fixed-rate mortgage was unchanged from last week at 3.30 percent. Borrowers who opted for a 15-year loan had a rate that was 70 BPS better than on 30-year mortgages, improving from the 68-basis-point spread reported in the prior survey.
A new record low was set for the five-year, Treasury-indexed, hybrid, adjustable-rate mortgage:Â 2.90 percent. Freddie reported the five-year ARM at 2.91 percent the prior week.
Also hitting a new low was the one-year Treasury-indexed ARM, which drifted down to 2.78 percent from 2.79 percent. The one-year averaged 3.25 percent at this point last year.
The yield on the one-year Treasury note, which is used to determine adjustments for the one-year ARM, closed Thursday at 0.12 percent, the same as a week earlier, according to Treasury Department data.
Reflecting continued anxiety over the European debt crisis, the six-month London Interbank Offered Rate jumped to 0.75 percent as of Wednesday from 0.71 percent seven days prior, according to data from Bankrate.com. LIBORÂ has risen every week since Sept. 14, when it stood at 0.50 percent.
ARMÂ inquiries accounted for 5.50 percent of all activity in the latest Mortgage Market Index report, falling from 5.86 percent in the prior report.
