Fixed mortgage rates crept up this past week but still remain within earshot of all-time lows. Some signals indicate rates could be lower in next week’s report. Unlike fixed rates, adjustable rates retreated.
A 2-basis-point rise from last week left the 30-year fixed-rate mortgage averaging 3.34 percent in Freddie Mac’s Primary Mortgage Market Survey for the week ended Dec. 6. The 30 year was 3.99 percent this week last year.
The 30-year fell to its lowest level on record in the week ended Nov. 21, when it averaged 3.31 percent, according to Freddie.
In the latest report, Freddie Mac Chief Economist Frank Nothaft said “indicators of stronger economic growth and signs of tame inflation” helped keep mortgage rates in check.
Mortgage rates could slip around 3 BPS by the time Freddie delivers its next report based on a Mortgage Daily analysis of this week’s Treasury market activity.
The yield on the 10-year Treasury note averaged 1.62 percent during the period which Freddie surveyed mortgage lenders for this week’s report, according to data from the Department of the Treasury. The 10-year yield, however, fell to 1.59 percent Thursday.
Half of the panelists surveyed by Bankrate.com for the week Dec. 6 to Dec. 12 predicted mortgage rates won’t move more than 2 BPS over the next seven days, while 42 percent saw lower rates ahead and just 8 percent forecasted a rise.
However, a stronger-than-expected employment report on Friday could have bond yields — and mortgage rates — moving higher, while a weak report could place more downward pressure on rates.
In the U.S. Mortgage Market Index report from Mortech Inc. and Mortgage Daily for the week ended Nov 30, jumbo mortgages were priced at a 51-basis-point premium over conforming loans, off from 53 BPS in the previous report.
Freddie reported that the 15-year fixed-rate mortgage averaged 2.67 percent this week, 3 BPS worse than the week ended Nov. 29. The discount for a 15-year mortgage was trimmed to 67 BPSÂ this week from 68 BPS a week earlier.
A 3-basis-point decline from last week left the average, five-year, Treasury-indexed, adjustable-rate mortgage at 2.69 percent in Freddie’s report.
The one-year, Treasury-indexed ARM averaged 2.55 percent in Freddie’s latest survey, lower than 2.56 percent seven days earlier and 2.80 percent in the week ended Dec. 8, 2011.
One-year ARM adjustments are triggered by movements in the one-year Treasury yield, which the Treasury Department reported was 0.18 percent Thursday, unchanged from seven days earlier.
Bankrate.com reported the six-month London Interbank Offered Rate at 0.53 percent as of Wednesday, also the same as a week prior.
ARMs accounted for 2.2 percent of all activity in the latest Mortgage Market Index report, off from 2.4 percent in the previous report.
