Fixed interest rates on residential loans were lower this past week than they’ve been in nearly three years. But one short-term outlook is for rates to increase.
A one-basis-point decline from one week previous left 30-year fixed rates on home loans averaging 3.58 percent during the week that ended on April 14.
That was the lowest average since the week ended May 16, 2013, when it was 3.51 percent, according to Freddie Mac’s Primary Mortgage Market Survey.
Thirty-year fixed rates averaged 3.67 percent one year previous.
Rates have moved up slightly since Freddie conducted this week’s survey, according to a written statement from MBSQuoteline Principal Joe Farr.
Fixed rates on home loans are likely to be around
4 BPS higher in next week’s survey from Freddie, according to a Mortgage Daily analysis of Treasury market activity.
But Bankrate.com Chief Financial Analyst Greg McBride disagreed with Mortgage Daily’s forecast.
“Global weakness and mixed news on the U.S. economy will hold mortgage rates down,” McBride said in a written statement to Mortgage Daily.
Nearly three-quarters of panelists surveyed by Bankrate.com for the week April 14 to April 20 predicted that mortgage rates won’t move more than 2 BPS over the next week. Just a fifth projected an increase, and only 7 percent expected a decline.
In the the U.S. Mortgage Market Index report from OpenClose and Mortgage Daily for the week ended April 8, interest rates on jumbo mortgages averaged 3 BPS less than conforming rates. The spread thinned from a negative 5 BPS a week earlier.
Freddie reported that 15-year fixed rates averaged 2.86 percent, down 2 BPS from the week ended April 7, 2016. The difference between 15- and 30-year rates widened to
72 BPS in the latest report from 71 BPS in the prior report.
At 2.84 percent in Freddie’s survey, five-year, Treasury-indexed, hybrid, adjustable-rate mortgages averaged 2 BPS more than in the previous report.
One-year ARMs averaged 2.41 percent as of Thursday, according to HSH.com, down from 2.50 percent seven days earlier.
Previously reported data from Freddie indicate that the one-year ARM averaged 2.46 percent in the week ended April 16, 2015.
Data from the Department of the Treasury indicate that the index for the one-year ARM, the yield on the one-year Treasury note, climbed to 0.55 percent as of Thursday from 0.52 percent one week prior.
With no change from one week earlier, the six-month London Interbank Offered Rate was 0.89 percent, Bankrate.com reported.
ARMs accounted for 8.8 percent of all rate locks tracked in the
latest Mortgage Market Index report. ARM share was wider than the prior week’s 8.0 percent.
