There was little movement in fixed rates on home loans over the past week. But it’s possible, if tomorrow’s jobs report isn’t too strong. that fixed rates could be lower in the next report.
The average 30-year fixed rate during the seven days that ended on Aug. 3 was 3.93 percent, according to the Primary Mortgage Market Survey from Freddie Mac.
Long-term fixed rates were up just a basis point from the previous survey. But the increase was more significant versus the 50-basis-point ascension from the same week last year.
Freddie Mac Chief Economist Sean Becketti noted in the report that rates held steady despite a strong advance estimate for the second-quarter gross domestic product.
“Markets are erring on the side of caution,” Becketti said.
A recent improvement in prices on mortgage-backed securities is likely not reflected in Freddie’s survey, according to a written statement from Joe Farr, who is the director of sales an marketing at MBSQuoteline. The movement suggests rates are now lower than reported in Freddie’s survey.
Mortgage Daily’s analysis of Treasury market data determined that fixed rates on single-family loans are likely to be roughly 4 BPS better in Freddie’s next survey.
But rates could be pushed up if tomorrow’s employment report is surprisingly strong.
Half of the panelists surveyed by Bankrate.com for the week Aug. 2 to Aug. 8 expected that interest rates won’t move more than 2 BPS during the upcoming week. An increase was expected by 30 percent, and just a fifth forecasted a decline.
For the week ended July 28, the U.S. Mortgage Market Index report from Mortgage Daily and OpenClose had jumbo rates 8 BPS above conforming rates. The jumbo-conforming spread was 7 BPS in the last report.
In Freddie’s report, 15-year fixed rates averaged 3.18 percent, a 2-basis-point improvement from the week ended July 27.
Based on the survey data, 15-year rates were 75 BPS lower than 30-year rates. The spread fattened versus 72 BPS the previous week.
A 3-basis-point decline from a week earlier was reported for five-year, Treasury-indexed, hybrid adjustable-rate mortgages, which averaged 3.15 percent.
Treasury Department data indicate that the yield on the one-year Treasury note
closed Thursday at 1.22 percent, no different than seven days earlier. The one-year yield is used to determine rate adjustments on hybrid ARMs.
At 1.45 percent as of Wednesday, the six-month London Interbank Offered Rate
was unchanged from the prior Wednesday, according to Bankrate.com data.
ARM share was 9.9 percent in the latest Mortgage Market Index report, slightly wider than 9.8 percent one week prior.
