A modest rise was recorded for mortgage rates this week, and several indicators suggest that they aren’t likely to change over the next week.
Thirty-year interest rates on residential loans that were closed during June averaged 4.8 percent, 30 basis points worse than a month earlier.
Average 30-year rates, which were the highest they’ve been since February, were down, however, from 4.9 percent as of 12 months earlier.
Ellie Mae Inc. reported the numbers in its Origination Insight Report June 2016.
Last month’s 30-year rates were 4.12 percent on conventional mortgages, 3.98 percent on loans insured by the Federal Housing Administration and 3.84 percent on mortgages guaranteed by the Department of Veterans Affairs.
More current data from Freddie Mac’s Primary Mortgage Market Survey indicate that 30-year fixed rates averaged 3.45 percent in the week ended July 21.
Long-term fixed rates rose from 3.42 percent the prior week but were lower than 4.04 percent one year ago.
“Post-Brexit volatility tapered off over the last two weeks, allowing interest rates to bounce back a bit from their record (10-year Treasury yield) and near-record (30-year mortgage rate) lows,” Freddie Mac Chief Economist Sean Becketti explained in the report.
Based on an analysis of Treasury market activity, Mortgage Daily predicts that rates won’t be much different in Freddie’s next survey.
Freddie’s Becketti also doesn’t see much movement ahead for mortgage rates.
“With the Federal Reserve on hold and the UK monetary authority taking at least a one-month breather, we don’t expect any significant movement in mortgage rates in the near-term,” he said.
A plurality of panelists surveyed by Bankrate.com for the week July 20 to July 26 were also in line with Mortgage Daily’s forecast of rate stability. Another 36 percent predicted rates will decline at least 3 BPS over the next week, and just 18 percent predicted an increase.
Greg, McBride, chief financial analyst at Bankrate.com, speculates that Federal Reserve comments next week could push up interest rates.
“A string of better economic data has ignited speculation about a potential September Fed hike,” McBride said in a written statement to Mortgage Daily. “If the Fed indicates at next week’s meeting that conditions are supportive of an interest rate hike, we’ll see a bit of lift on mortgage rates.”
In its Housing Forecast: July 2016, Fannie predicted that 30-year fixed rates will average 3.5 percent in the third quarter and each of the following three quarters.
The Mortgage Bankers Association projects in its MBA Mortgage Finance Forecast that 30-year rates will go from 3.6 percent during the current quarter to 3.8 percent three months later and 4.0 percent in the first-quarter 2017.
Rates on jumbo mortgages were 14 BPS higher than conforming rates in the U.S. Mortgage Market Index report from Mortgage Daily and OpenClose for the week ended July 15 The jumbo-conforming spread widened from 12 BPS the prior week.
On 15-year mortgages, fixed rates averaged 2.75 percent, 3 BPS higher than in the week ended July 14. Fifteen-year rates were
70 BPS lower than 30-year rates, the same spread as a week earlier.
Freddie reported that five-year, Treasury-indexed, hybrid, adjustable-rate mortgages averaged 2.78 percent this week, 2 BPS more than in the last report.
Fannie expects hybrid ARMs to average 2.9 percent this quarter then rise 10 BPS each of the following two quarters.
The average one-year ARM slipped to 2.58 percent Thursday from
2.60 percent seven days earlier, HSH.com reported. Freddie previously reported that one-year ARMs averaged 2.54 percent in the week ended July 23, 2015.
The index for one-year ARMs, the yield on the one-year Treasury note, closed Thursday at 0.54 percent, a basis point more than as of one week previous, Treasury Department data indicate.
Another ARM index, the six-month London Interbank Offered Rate, climbed to 1.01 percent as of Wednesday, climbing from
0.97 percent seven days prior, Bankrate.com reported.
Ellie’s report indicated that ARM share rose to 4.8 percent last month from 4.5 percent in May but slipped from 4.9 percent in June 2015.
