Interest rates on residential loans moved lower this past week, and there are currently no indications they might bounce back.
During the week ended Jan. 28, thirty-year fixed rates averaged 3.79 percent in Freddie Mac’s
Primary Mortgage Market Survey.
Rates retreated from one week prior, when the 30 year averaged 3.81 percent, but increased from 3.66 percent one year prior.
“The recent market turmoil has given the Fed pause; as was universally expected, the Fed stood pat this week but kept its options open for a rate increase in March,” Freddie Mac Chief Economist Sean Becketti said in the report. “This week’s housing releases confirmed the momentum of home sales going into 2016. A hesitant Fed, sub-4-percent mortgage rates (at least for a little while longer), and strong housing fundamentals should generate a three percent increase in home sales this year.”
A written statement from MBSQuoteline Director Joe Farr indicated that mortgage rates have improved since Freddie conducted its latest survey.
Fixed mortgage rates are unlikely to move much over the next week, maybe around two BPS lower, according to a Mortgage Daily analysis of Treasury market activity.
No change in rates was predicted by a plurality of panelists surveyed by Bankrate.com for the week Jan. 28 to Feb. 3. A decline of at least three BPS was projected by 36 percent of the panelists, and an increase was expected by 18 percent.
Interest rates on jumbo mortgages were 25 BPS less than on conforming loans in the U.S. Mortgage Market Index report from OpenClose and Mortgage Daily for the week ended Jan. 22. The jumbo-conforming spread widened from a negative 23 BPS in the last report.
In Freddie’s survey, 15-year fixed rates averaged 3.07 percent, three BPS better than in the week ended Jan. 21. The spread between 15- and 30-year rates
widened to 72 BPS from 71 BPS in the last report.
Freddie reported five-year, Treasury-indexed, hybrid, adjustable-rate mortgages at an average of 2.90 percent, a basis point less than seven days previous.
One-year Treasury-indexed ARMs averaged 2.57 percent in the week ended Jan. 26, HSH reported. The one-year ARM was previously reported at 3.10 percent for the prior week.
A year earlier, Freddie reported the one-year ARM at
2.38 percent.
One-year ARMs adjust based on the one-year Treasury yield, which the Treasury Department reported at 0.47 percent as of Thursday — unchanged for four consecutive days and up from 0.44 percent seven days earlier.
Another index utilized on some ARMs is the six-month London Interbank Offered Rate, or LIBOR, which was 0.86 percent as of Wednesday, the same as a week prior, Bankrate.com reported.
ARM share fell to 8.6 percent in the latest Mortgage Market Index report from 10.1 percent one week prior.
