Interest rates on residential loans improved this past week and could hold. Loans to veterans had rates that were lower than than on government-insured and conventional mortgages.
Thirty-year fixed rates averaged 4.00 percent in Freddie Mac’s Primary Mortgage Market Survey for the week ended June 18.
The 30 year declined from 4.04 percent in the previous survey, while it was 17 basis points better than the same week in 2014.
Ellie Mae Inc. said in its Origination Insight report that 30-year fixed rates averaged 4.013 percent for all loans closed in May, off from 4.062 percent the previous month.
On conventional mortgages, 30-year fixed rates averaged 4.106 percent last month, Ellie said. Rates on loans insured by the Federal Housing Administration were 3.942 percent, while rates on mortgages guaranteed by the Department of Veterans Affairs were lowest at 3.841 percent.
Prices on mortgage-backed securities have modestly improved since Freddie conducted its survey, according to Joe Farr, director at MBSQuoteline.
The improvement in MBS prices indicates an decline in mortgage rates.
Not much change is likely in fixed mortgage rates over the next week based on Mortgage Daily’s analysis of Treasury market activity.
But predictions from a plurality of panelists surveyed by Bankrate.com for the week June 18 to June 24 are that rates will increase at least three BPS over the next week. A third forecasted no change, and less than a quarter projected a decline.
In the Mortgage Market Index report for the week ended June 12, jumbo rates were 10 BPS more than conforming rates. The jumbo-conforming spread fell from 15 BPS a week earlier.
Freddie reported that 15-year fixed rates averaged 3.23 percent, two BPS lower than in the week ended June 11. The spread between 15- and 30-year rates was cut to
77Â BPS from 79 BPS in the last report.
Fifteen-year mortgages accounted for 9.8 percent of loan originations in May, according to Ellie, thinning from 10.3 percent a month earlier.
At 3.00 percent — five-year, Treasury-indexed,
hybrid, adjustable-rate mortgages were down a single basis point from Freddie’s survey one week prior.
No change from Freddie’s last report left one-year Treasury-indexed ARMs at 2.53 percent. The one year was higher, however, than 2.41 percent in the week ended June 19, 2014.
The index for one-year ARMs, the one-year Treasury yield, slipped two BPS from seven days prior to close Thursday at 0.26 percent, according to the Department of the Treasury.
Also serving as an index on some ARMs is the six-month London Interbank Offered Rate, which
was 0.45 percent as of Wednesday, a basis point more than one week prior.
The latest Mortgage Market Index report had ARM share at 9.2 percent, wider than 9.1 percent in the previous report.
ARM share of closed loan production inched up to 4.7 percent last month from 4.5 percent in April, Ellie reported.
