Given no economic event before then, mortgage rates are poised to come in lower in next week’s reports. But this week’s rates inched higher.
Of all the loan programs tracked in Freddie Mac’s Primary Mortgage Market Survey for the week ended Thursday, the average 30-year fixed-rate mortgage increased the most from last week: 6 basis points. The 30-year was 4.80 percent this week and 4.98 percent a year ago.
Positive economic news from the Conference Board was behind the week-over-week increase, according to Freddie’s chief economist, Frank Nothaft.
Freddie’s regulator, the Federal Housing Finance Agency, reported that the average conforming 30-year was 4.61 percent in December, up 23 BPS from November.
The jumbo-conforming spread was 73 BPS in the Mortech-Mortgage Daily Mortgage Market Index report for the week ended Wednesday. The spread eased from the prior week’s 72 BPS and was a whole lot better than 113 BPS this same week last year.
Since last Thursday, the yield on the 10-year Treasury has fallen from 3.47 percent to 3.42 percent at today’s close, according to data from the Department of the Treasury. Given the 6-basis-point rise in the 30-year loan, mortgage rates are likely to be around 10 BPS better in next week’s reports.
Mortgage rates are not going anywhere during the next week, however, according to 87 percent of the panelists surveyed by Bankrate.com for the week Jan. 27 to Feb. 2. Rates will rise at least 3 BPS based the remaining panelists.
The average 15-year fixed-rate mortgage climbed to 4.09 percent from last week’s 4.05 percent in the report from Freddie.
The one-basis-point weekly rise in the five-year Treasury-indexed hybrid adjustable-rate mortgage was the smallest among all of the products tracked by Freddie. The five-year averaged 3.70 percent this week.
The one-year Treasury-indexed ARM was also up a basis point from last week to 3.26 percent in Freddie’s survey. The one-year was 103 BPS better than at the same time last year.
The index used to determine rate changes on the one-year ARM, the yield on the one-year Treasury, fell to 0.25 percent Thursday from 0.27 percent a week earlier based on the Treasury Department data. FHFA said that the ARMÂ index, the “National Average Contract Mortgage Rate for the Purchase of Previously Occupied Homes by Combined Lenders,” was 4.58 percent in November, 16 BPSÂ higher than October. The six-month LIBORÂ was unchanged over the past seven days at 0.46 percent, Bankrate.com data indicated.
The share of borrowers who opted for an ARM was 5.2 percent in the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ended Jan. 21. The previous week’s share was 5.0 percent.
New mortgage activity was up 2 percent this week based on the Mortgage Market Index. But compared to a year earlier, the index was off 16 percent.
A 6 percent improvement in purchase applications drove the weekly rise, as refinances fell 2 percent. Refinance share fell to 49 percent from 51 percent.
MBA’s data on last week’s activity indicated that mortgage applications fell 13 percent on a seasonally adjusted basis, with refinances tumbling 15 percent and purchase activity off 9 percent.
