Mortgage rates moved lower this week, with 30-year fixed rates seeing the biggest improvement. Market data suggest that little change is likely during the short term.
At 4.32 percent, fixed-rate 30-year mortgages averaged 18 basis points less than a week earlier, according to Freddie Mac’s Primary Mortgage Market Survey for the week ended Sept. 25. Thirty-year rates were higher, however, than 3.40 percent during the same week in 2012.
Freddie said that it was the lowest level for 30-year fixed rates in nine weeks.
Freddie Mac Chief Economist Frank Nothaft explained in the report that rates were lower on the Federal Reserve’s announcement that it will maintain its bond purchases.
On just purchase financing, contract mortgage rates jumped 25 BPS from July to 4.26 percent in August, the Federal Housing Finance Agency reported.
Mortgage rates aren’t likely to be much different in Freddie’s next report based on Mortgage Daily’s analysis of Treasury market activity. During the period when Freddie surveyed primary lenders for this week’s survey, the yield on the 10-year Treasury note averaged 2.67 percent, near the 2.66 percent level it closed at Friday, according to data reported by the Department of the Treasury.
Panelists at Bankrate.com for the week Sept. 26 to Oct. 2 were far more optimistic, with 70 percent forecasting at least a 3-basis-point decline over the following week. Another 20 percent saw no changes ahead, and just 10 percent predicted an increase.
The Mortgage Bankers Association predicts that 30-year fixed rates will rise from an average of 4.6 percent in the third quarter to 4.8 percent in the fourth quarter — where they will stay through at least the first quarter of next year.
Jumbo mortgages were priced at a 25-basis-point premium over conforming loans in the Mortgage Market Index report from LoanSifter and Mortgage Daily for the week ended Sept. 20, a little more competitive than the 27-basis-point spread the previous week.
A 17-basis-point decline from the week ended Sept. 19 was recorded by Freddie for 15-year mortgages, which averaged 3.37 percent in the latest report. The discount for 15-year loans slipped to 95 BPSÂ from 96 BPS in the prior report.
Freddie reported that five-year, Treasury-indexed, hybrid, adjustable-rate mortgages averaged 3.07 percent this week, down from 3.11 percent seven days prior.
One-year Treasury-indexed ARMs averaged 2.63 percent in Freddie’s report, 2 BPS lower than in the previous week. The average was up 3 BPS, however, from the week ended Sept. 27, 2012.
The index for the one-year ARM, the yield on the one-year Treasury note, fell to 0.09 percent Thursday from 0.10 percent a week earlier, according to Treasury Department data.
The six-month London Interbank Offered Rate was 0.38 percent Wednesday, Bankrate.com reported. LIBOR, which also serves as an ARM index, was no different than a week prior.
ARM share inched up to 11.0 percent in the latest Mortgage Market Index report from 10.8 percent seven days earlier.
