Interest rates on residential loans turned lower over the past seven days. But an increase is likely with fixed rates over the next seven days.
During all of January, conforming fixed rates on purchase-money loans averaged 4.37 percent, the Federal Housing Finance Agency reported.
FHFA said that the average, which is based on a small monthly survey of mortgage lenders,
increased from 4.08 percent in December 2016.
Thirty-year fixed rates averaged 4.10 percent in the Primary Mortgage Market Survey from Freddie Mac for the week ended March 2.
Long-term fixed rates improved from a week earlier, retreating 6 basis points. But the average was far higher than 3.64 percent a year earlier.
Fixed rates are poised to surge around 10 BPS in Freddie’s next report based on an analysis of Treasury market activity by Mortgage Daily.
Seventy percent of the panelists surveyed by Bankrate.com for the week March 2 to March 8 agreed with Mortgage Daily and predicted rates will rise. The other 30 percent didn’t expect rates to move more than 2 BPS, and none predicted a decline.
Freddie projected in its
February 2017 Economic & Housing Market Forecast that 30-year fixed rates will average 4.3 percent this quarter, 4.4 percent in the second quarter and 4.5 percent in the following two quarters.
Jumbo interest rates were 10 BPS less than conforming rates in the U.S. Mortgage Market Index report from OpenClose and Mortgage Daily for the week ended Feb. 24. The jumbo-conforming spread widened from 6 BPS in the previous report.
On 15-year mortgages, fixed rates averaged 3.32 percent in Freddie’s survey, down 5 BPS from the week ended Feb. 23, 2017. The spread between 15- and 30-year mortgages was 78 BPS, thinning from 79 BPS the prior week.
Freddie reported that five-year, Treasury-indexed, hybrid, adjustable-rate mortgages averaged 3.14 percent in the latest report, a 2-basis-point improvement from one week previous.
In its outlook, Freddie projects hybrid rates will go from 3.4 percent in the first quarter to 3.5 percent three months later and 3.6 percent in the third quarter.
Hybrid ARMs adjust based on movement in the one-year Treasury yield, which leapt to 0.98 percent Thursday from 0.81 percent seven days earlier.
The six-month
London Interbank Offered Rate, which serves as an index on some legacy ARMs, was 1.37 percent as of Wednesday, Bankrate.com reported, rising ever so slightly from 1.36 percent the prior Wednesday.
ARMs accounted for 7.8 percent of all rate locks in the latest Mortgage Market Index report. ARM share was slashed from 10.8 percent the previous week.
