Fixed mortgage rates moved higher this week and appear likely to jump more than 10 basis points by the next report. One-year adjustable-rate mortgages, however, moved lower.
An eight-basis-point increase from last week in 30-year fixed rates left long-term mortgages averaging 4.39 percent in Freddie Mac’s Primary Mortgage Market Survey for the week ended Aug. 1.
The increase was even more dramatic compared to the week ended Aug. 2, 2012, when 30-year mortgages averaged just 3.55 percent.
“Mortgage rates rose slightly leading up to the Federal Reserve’s monetary policy statement this week,” explained Frank Nothaft, Freddie’s chief economist, in the report. “The statement indicated no change in monetary policy. The Fed indicated that the economy expanded at a modest pace, but the unemployment rate remains elevated.”
Freddie’s regulator and conservator, the Federal Housing Finance Agency, reported that 30-year rates on purchase financing averaged 3.55 percent in June, 15 BPS higher than in May.
Thirty-year mortgage rates are poised for a hefty increase in Freddie’s next report, according to Mortgage Daily’s analysis of this week’s Treasury market activity.
The 10-year Treasury note yield averaged 2.61 percent during the period when Freddie surveyed primary lenders for this week’s report, the Treasury Department reported. With the 10-year yield closing Thursday at 2.74 percent — 30-year rates are likely to be around 13 BPS worse in the next survey.
But a plurality of panelists surveyed by Bankrate.com for the week Aug. 1 to Aug. 7 see it differently — predicting that rates will fall at least 3 BPS over the next week. An equal share — 29 percent — each predicted that rates won’t move or will rise.
Jumbo mortgages were priced at a 23-basis-point premium to conforming loans in the U.S. Mortgage Market Index report from LoanSifter and Mortgage Daily for the week ended July 26. The jumbo-conforming spread declined from 24 BPS in the prior report.
Freddie reported the average 15-year fixed-rate mortgage at 3.43 percent, 4 BPS worse than the week ended July 25. Fifteen-year mortgages were priced at a 96-basis-point discount to 30-year loans, improving from the 92-basis-point spread seven days prior.
Five-year, Treasury-indexed, hybrid ARMs averaged 3.18 percent in Freddie’s report, up just 2 BPS from the previous survey.
In contrast to the other products tracked by Freddie, the one-year Treasury-indexed ARM was lower this week — slipping one basis point to 2.64 percent. The one year was also better than 2.70 percent in the same week last year.
The one-year Treasury note yield closed Thursday at 0.13 percent, one basis point more than a week earlier, according to the Treasury Department.
Bankrate.com reported that the six-month London Interbank Offered Rate, which like the one-year Treasury yield serves as an ARMÂ index, was unchanged from a week earlier at 0.40 percent as of Wednesday.
ARM share was 9.1 percent in the latest Mortgage Market Index report, down from 9.4 percent in the previous report.
