Interest rates on residential loans were solidly lower over the past seven days. Rates are likely to refrain from moving much over the next seven days.
In Freddie Mac’s Primary Mortgage Market Survey for the week that concluded on May 25, thirty-year fixed rates averaged 3.95 percent.
That was the lowest level for the 30 year this year and the lowest since the week ended Nov. 17, 2016, when 30-year rates averaged
3.94 percent.
The decline was “largely due to last Wednesday’s Trump-related rally in mortgage-backed security prices,” MBSQuoteline Director of Sales and Marketing Joe Farr explained in a written statement to Mortgage Daily. He said rates haven’t moved much since Freddie conducted its survey.
In Freddie’s report for last week, 30-year rates were 4.02 percent, while they stood at 3.64 percent a year ago.
Freddie’s next report is likely to reflect fixed rates that are
roughly the same as the current report or a couple basis points lower based on a Mortgage Daily analysis of Treasury market data.
Sixty percent of panelists surveyed by Bankrate.com for the week May 24 to May 30 agreed with Mortgage Daily’s forecast and predicted mortgage rates won’t move more than 2 BPS over the next week. An increase was predicted by 30 percent, and a descension was expected by 10 percent.
During the second quarter, 30-year fixed rates are expected to average 4.1 percent, according to Freddie’s May 2017 Economic & Housing Market Forecast. They’ll move up 10 BPS each in the third and fourth quarters.
The U.S. Mortgage Market Index report from Mortgage Daily and OpenClose for the week ended May 19 indicated that interest rates on jumbo loans were 3 BPS more than conforming rates, swinging from a negative 1-basis-point spread the prior week.
Fifteen-year fixed rates averaged 3.19 percent, dropping from 3.27
percent in the week ended May 18, according to the PMMS. At 76 BPS less than 30-year rates, the spread between 15- and 30-year rates was a little wider than the 75-basis-point spread in the last report.
A 6-basis-point decline from the preceding report left Treasury-indexed, hybrid, adjustable-rate mortgages averaging 3.07 percent.
Freddie predicts hybrid ARMs will average 3.2 percent in the current quarter, 3.3 percent in the third quarter and 3.5 percent three months later.
The yield on the one-year Treasury, which determines rates adjustments on hybrid ARMs, closed Thursday at 1.16 percent, increasing from 1.09 percent seven days earlier, the Department of the Treasury reported.
The
six-month London Interbank Offered Rate, which is utilized as an index on some legacy ARMs, was 1.41 percent Wednesday, Bankrate.com reported. LIBOR dipped from 1.42 percent the previous Wednesday.
ARM share in the most-recent Mortgage Market Index report was 8.9 percent, slimming from 10.6 percent one week previous.
