Fifteen-year mortgages became far more competitive this week as fixed rates leapt. Hybrid adjustable-rate mortgages, meanwhile, were the only product to improve over the last seven days. Mortgage rates aren’t likely to be much different in the next report.
At 3.63 percent, the 30-year fixed-rate mortgage averaged 11 basis points more than it did a week earlier, according to Freddie Mac’s Primary Mortgage Market Survey for the week ended March 14. Compared to a year earlier, the 30 year was 29 BPS lower.
“Fixed mortgage rates rose this week on stronger signs of jobs growth and consumer spending,” said Freddie Mac Chief Economist Frank Nothaft in the report. “The economy added 236,000 new workers in February which helped push down the unemployment rate to 7.7 percent. This helped offset the effects of the payroll tax holiday expiration and led to a 1.1 percent increase in retail sales, which was well above the market consensus forecast.”
Rate’s aren’t likely to be much different in Freddie’s next report based on an analysis of Treasury market data by Mortgage Daily. The 10-year Treasury note yield averaged 2.05 percent during the period when Freddie surveyed lenders for this week’s report, while the 10-year yield closed at 2.04 percent Thursday, according to data released by the U.S. Department of the Treasury.
A majority of panelists surveyed by Bankrate.com for the week March 14 to March 20 expected rates to increase. More than a third predicted that rates won’t move more than 2 BPS over the next seven days, and just 9 percent forecasted a decline.
Jumbo mortgages were priced 17 BPS higher than conforming loans in the U.S. Mortgage Market Index report from Optimal Blue and Mortgage Daily for the week ended March 8. The prior report indicated that the jumbo-conforming spread was 19 BPS.
Freddie reported the average 15-year mortgage at 2.79 percent, just 3 BPS more than last week. The small rise left the 15 year 84 BPS better then the 30 year — a huge improvement from the 76-basis-point spread a week prior.
But the five-year, Treasury-indexed, hybrid ARM fell 3 BPS from last week to land at 2.79 percent in Freddie’s survey.
A 1-basis-point rise from Freddie’s last report in the one-year Treasury-indexed ARM pushed it up to 2.64 percent. But the one year remains well below the 2.79 percent in the week ended March 15, 2012.
The index for the one-year ARM, the yield on the one-year Treasury note, was 0.15 percent Thursday, according to Treasury Department data. The one-year Treasury yield has not moved since March 4, when it stood at 0.16 percent.
The six-month London Interbank Offered Rate was 0.45 percent Wednesday, Bankrate.com reported. LIBOR was unchanged from the previous Wednesday.
ARMs accounted for 4.5 percent of all activity in the latest Mortgage Market Index report. ARM share was 4.4 percent in the previous report.
