Fixed rates on residential loans fell to their lowest level in 10 weeks, and the outlook for the next report is for mortgage rates to linger where they are now.
Thirty-year fixed interest rates on
conventional mortgages utilized to finance a home purchase with conforming loan amounts averaged 3.74 percent in August.
Long-term rates on residential loans declined from the prior month’s 3.80 percent and have moved lower each month since they were 4.23 percent in January.
Historical data from the Federal Housing Finance Agency, which reported the latest rates, indicate that
fixed rates averaged 4.20 percent in August 2015.
During just the week ended Sept. 29, thirty-year fixed rates averaged 3.42 percent, according to Freddie Mac’s Primary Mortgage Market Survey.
The 30 year fell from 3.48 percent a week earlier to its lowest level since the week ended July 14. Thirty-year rates averaged 3.85 percent a year earlier.
“Investors flocked to the safety of government bonds causing the 10-year Treasury yield to continue its descent following the FOMC’s decision to leave rates unchanged,” Freddie Mac Chief Economist Sean Becketti explained in the report.
A Mortgage Daily analysis of Treasury market activity suggests that fixed mortgage rates aren’t likely to be much different in Freddie’s next survey.
A majority of panelists surveyed by Bankrate.com for the week Sept. 29 to Oct. 5 agreed with Mortgage Daily’s forecast. A quarter predicted a decline of at least 3 BPS, and 17 percent expected rates to rise.
The National Association of Federal Credit Unions predicted in its
NAFCU Economic & CU Monitor: Forecast that 30-year mortgage rates will average 3.6 percent this year and 4.0 percent in 2017.
The
U.S. Mortgage Market Index report from OpenClose and Mortgage Daily for the week ended Sept. 23 had interest rates on jumbo mortgages averaging 8 BPS more than conforming rates. The jumbo-conforming spread widened from 6 BPS one week previous.
Freddie’s survey had 15-year
fixed rates averaging 2.72 percent, 4 BPS better than in the week ended Sept. 22. The spread between 15- and 30-year rates thinned to 70 BPS from 72 BPS in the previous report.
At 2.81 percent, five-year, Treasury-indexed, hybrid, adjustable-rate mortgages averaged a basis point more than in the prior week’s report.
One-year Treasury-indexed ARMs averaged 2.50 percent as of Thursday, HSH.com reported, the same as seven days earlier.
Freddie previously reported that one-year ARMs averaged 2.53 percent in the week ended Oct. 1, 2015.
The index for the one-year ARM, the yield on the one-year Treasury note, closed at 0.59 percent
Thursday, according to data from the Department of the Treasury. The one-year yield was down from 0.60 percent a week previous.
The six-month London Interbank Offered Rate
was 1.24 percent as of Wednesday, Bankrate.com reported. LIBOR, which serves as an index on a small share of ARMs, was down from 1.26 percent seven days prior.
ARM share in the most-recent Mortgage Market Index report thinned to 6.0 percent from 6.6 percent in the previous week’s report.
