30-Year Mortgage Rate Dips, Could Ease Further

Fixed interest rates on home loans were little moved over the past week but are poised for a potential decline in the next report.

Thirty-year fixed rates averaged 4.19 percent in Freddie Mac’s Primary Mortgage Market Survey for the week ended Oct. 2.

The 30-year average dipped 1 basis point compared to the prior week and was 3 BPS lower than in the same week last year.

The Federal Housing Finance Agency reported that conforming 30-year fixed rates averaged 4.33 percent in August, 1 basis point less than in July.

Fixed rates are likely to be around 4 BPS lower in next week’s report based on this week’s Treasury market activity.

Data from the Department of the Treasury indicated that the 10-year Treasury yield — a benchmark for fixed mortgage rates — averaged 2.48 percent during Freddie’s survey period and closed at 2.44 percent Thursday.

Half of the panelists surveyed by Bankrate.com for the week Oct. 2 to Oct. 8 predicted that rates will fall at least 3 BPS over the next week. No change was forecasted by 42 percent, and just 8 percent predicted an increase.

Interest rates on jumbo mortgages were 4 basis points less than on conforming loans in the U.S. Mortgage Market Index from LoanSifter/Optimal Blue and Mortgage Daily for the week ended Sept. 26, about the same as the prior week.

Freddie said that 15-year fixed rates averaged 3.36 percent, the same as in the week ended Sept. 25. The spread between 15- and 30-year mortgages was 83 BPS, not quite as good as the 84-basis-point spread one week earlier.

At 3.06 percent — five-year, Treasury-indexed, hybrid, adjustable-rate mortgages averaged 2 BPS less than in Freddie’s last report.

Freddie reported the average one-year ARM at 2.42 percent, a basis point better than in the last report. The one-year ARM rate has tumbled 22 BPS from the week ended Oct. 3, 2013.

One-year ARMs adjust with the yield one the one-year Treasury, which the Treasury Department reported at 0.10 percent Thursday, unchanged from seven days earlier.

There’s been no change in the six-month London Interbank Offered Rate — or LIBOR — since June, leaving the index at 0.33 percent as of Wednesday, Bankrate.com reported.

ARM share was 11.9 percent in the latest Mortgage Market Index report, thinning from 12.0 percent in the previous report.