Even though fixed interest rates on residential loans moved higher this past week, there is a good chance they will be lower in next week’s report.
Average commitment rates on 30-year fixed-rate mortgages were 3.91 percent in Freddie Mac’s Primary Mortgage Market Survey for the week ended June 15.
Long-term rates increased from the preceding week, when the 30-year mortgage was 3.89 percent — the lowest average since the week ended Nov. 10, 2016.
“Our survey was conducted before investors drove Treasury yields sharply lower in a reaction to the surprisingly weak CPI release,” Freddie Mac Chief Economist Sean Becketti said in the report. “If that drop in yields sticks, mortgage rates are likely to follow in next week’s survey.”
MBSQuoteline Director of Sales and Marketing Joe Farr confirmed Becketti’s comments, noting in a written statement to Mortgage Daily that prices on mortgage-backed securities improved following Wednesday’s weak retail sales and low inflation data.
In the same week last year, Freddie reported that 30-year fixed rates averaged 3.54 percent.
Mortgage Daily’s analysis of Treasury market activity indicates that fixed rates on residential loans could be around 3 basis points lower in Freddie’s next survey.
But 60 percent of panelists surveyed by Bankrate.com for the week June 14 to June 20 predicted that rates won’t change over the next week. Just 30 percent expected rates to rise at least 3 BPS, and only 10 percent forecasted an increase.
The Mortgage Bankers Association predicted in its
MBA Mortgage Finance Forecast that 30-year fixed rates will average 4.1 percent this quarter, 4.2 percent in the third quarter and 4.4 percent in the final-three months of this year.
Interest rates on jumbo mortgages
were 5 BPS more than conforming rates in the U.S. Mortgage Market Index from Mortgage Daily and OpenClose for the week ended June 9, swinging from less than a negative basis point spread the prior week.
In Freddie’s report, 15-year fixed rates averaged 3.18 percent, rising 2 BPS from the week ended June 8.
The spread between 15- and 30-year mortgages remained at 73 BPS.
At 3.15 percent, five-year, Treasury-indexed, hybrid, adjustable-rate mortgages were 4 BPS worse than a week ago.
Rates on hybrid ARMs adjust based on the one-year Treasury yield, which climbed to 1.21 percent Thursday from 1.19 percent seven days earlier, according to data from the Department of the Treasury.
The six-month London Interbank Offered Rate was 1.42 percent as of Wednesday, Bankrate.com reported. LIBOR was unchanged from the previous Wednesday.
ARM share thinned to 8.7 percent in the latest Mortgage Market Index report from 9.3 percent one week earlier.
