For three weeks in a row now, interest rates on residential loans have moved higher. But that trend is poised to halt.
In its Primary Mortgage Market Survey for the week ended May 14, Freddie Mac reported the average 30-year fixed rate at 3.85 percent.
Thirty-year rates jumped five basis points from the previous survey. But long-term mortgage rates were lower than in the same week last year, when the average was 4.20 percent.
Fixed rates have risen each week since
the week ended April 23, when the 30 year averaged 3.65 percent.
“The labor market continues to improve with U.S. economy adding 223,000 jobs in April, a solid rebound from merely 85,000 job gains in March,” Freddie Mac Deputy Chief Economist Len Kiefer stated in the report. “Also, the unemployment rate dipped to 5.4 percent in April as the participation rate ticked up to 62.8 percent and jobless claims were far less than expected.”
But that trend could end in Freddie’s next survey, based on Mortgage Daily’s analysis of Treasury market activity — which indicates that fixed rates could be around 5 BPS less in Freddie’s next survey.
A majority of panelists surveyed by Bankrate.com for the week May 14 to May 20 disagreed with Mortgage Daily and predicted rates will increase at least three BPS over the next week. A decline was forecasted by 29 percent, and 14 percent projected no change.
Rate inquiries for jumbo mortgages in the U.S. Mortgage Market Index report from Optimal Blue and Mortgage Daily for the week ended May 8 were 17 BPS higher than conforming rates. The jumbo-conforming spread slipped from 18 BPS the prior week.
A five-basis-point increase from the week ended May 7 was recorded by Freddie for 15-year fixed rates, which averaged 3.07 percent. The spread between 15- and 30-year rates was unchanged from a week earlier at 78 BPS.
Freddie reported that five-year, Treasury-indexed, hybrid, adjustable-rate mortgages averaged 2.89 percent in the most-recent report, a basis point less than last week.
One-year Treasury-indexed ARMs averaged 2.48 percent in Freddie’s survey,
2 BPS more than in the last report. In the week ended March 15, 2014, one-year ARMs averaged 2.43 percent.
The Department of the Treasury reported that the index for the one-year ARM, the yield on the one-year Treasury note, closed Thursday at 0.23 percent,
a basis point less than one week earlier.
At 0.41 percent as of Wednesday, another ARM index — the six-month London Interbank Offered Rate — was unchanged from
the previous Wednesday, according to Bankrate.com.
In the most-recent Mortgage Market Index report, ARM share widened to 9.3 percent from 8.7 percent the prior week.
