While mortgage rates were barely changed this week, market activity points to a decline by next week’s report.
The average 30-year mortgage moved up a basis point from last week to 4.00 percent in Freddie Mac’s Primary Mortgage Market Survey for the week ended Nov. 17. The 30-year fixed-rate mortgage was 39 BPS better than this week last year.
An analysis of Treasury market data suggests that the 30-year could be around 8 BPS better in next week’s report. The yield on the 10-year Treasury note closed today at 1.96 percent, falling from 2.04 percent last week, according to the Department of the Treasury.
An equal share of Bankrate.com panelists — 27 percent — predicted in the survey for the week Nov. 17 to Nov. 23 that rates will either move up or down at least 3Â BPS over the next seven or so days. The rest saw no changes ahead.
The Mortgage Bankers Association predicts that the 30-year mortgage will average 4.2 percent this quarter and during the first-quarter 2012 then climb to 4.7 percent by the end of next year.
Jumbo borrowers paid a 60-basis-point premium over conforming borrowers in the U.S. Mortgage Market Index report from Mortech Inc. and MortgageDaily.com for the week ended Nov. 11. The prior week’s conforming-jumbo spread was 61 BPS.
At 3.31 percent, the average 15-year mortgage was also up 1 basis point from last week, Freddie said. Fifteen-year borrowers got a discount of 69 BPS over 30-year borrowers, the same spread as last week.
Freddie reported that the five-year, Treasury-indexed, hybrid, adjustable-rate mortgage fell a basis point over the past seven days to 2.97 percent.
But the one-year, Treasury-indexed ARM increased to 2.98 percent from last week’s 2.95 percent and was 3.26 percent a year earlier. The one year’s underlying index, the yield on the one-year Treasury note, closed today at 0.10 percent, the same as a week earlier, based on Treasury Department data.
The London Interbank Offered Rate, or LIBOR, continued its ascent, jumping to 0.67 percent Wednesday from 0.64 percent last week, according to Bankrate.com.
The Office of the Comptroller of the Currency released its cost of funds report indicating that the national monthly median cost of funds ratio for OTS-regulated institutions fell to 1.25 percent in September from August’s 1.28 percent.
ARM share of pricing inquiries in the latest Mortgage Market Index report was 5.78 percent, lower than the previous week’s 5.83 percent.
MBA has ARM share of loan applications at 4 percent for the entire second half of this year, 5 percent in the first-half 2012 and 6 percent for the rest of next year.
