Although monthly rates on single-family loans were stable, weekly rates turned sharply higher. But next week’s rates might be a little lower.
Fixed interest rates on 30-year conforming residential loans that are utilized to finance a home purchase
averaged 4.17 percent during December.
Compared to the previous month, there was no change in conforming rates. But the average was 9 basis points higher than in December 2016.
That was according to a small survey of primary mortgage lenders conducted by the Federal Housing Finance Agency.
In the seven days ended Jan. 25, 2018, thirty-year fixed rates averaged 4.15, according to Freddie Mac’s Primary Mortgage Market Survey. The average soared 11 BPS from the prior week but was 4 BPS lower than a year prior.
A Mortgage Daily analysis of Treasury market activity suggests that fixed mortgage rates could be around 3 BPS lower in Freddie’s next survey.
A majority of panelists surveyed by Bankrate.com for the week Jan. 24 to Jan. 30, however, predicted mortgage rates will increase at least 3 BPS over the next week. A third expected no change, and just 11 percent projected a decline.
In its Housing Forecast: January 2018, Fannie Mae predicted 30-year fixed-rates will average 4.0 percent during the first-two quarters of this year and 4.1 percent in the second-two quarters.
The Mortgage Bankers Association projected in its MBA Mortgage Finance Forecast that 30-year fixed rates will average 4.2 percent in the first quarter and rise 20 BPS each of the remaining quarters of this year.
Jumbo rates were 29 BPS higher than conforming rates in the U.S. Mortgage Market Index report from Mortgage Daily and OpenClose for the week ended Jan. 19. The spread was no different than a week earlier.
Freddie’s survey had 15-year fixed rates averaging 3.62 percent, leaping 13 BPS from the week ended Jan. 18. Fifteen-year rates were 53 BPS lower than 30-year rates, a wider spread than 55 BPS in the preceding report.
At 3.52 percent, five-year Treasury-indexed, hybrid adjustable-rate mortgages were 6 BPS higher than in Freddie’s last report.
Fannie expects hybrid ARMs to average 3.5 percent in the first-two quarters of 2018 then rise to 3.6 percent in the third quarter.
The yield on the one-year Treasury note, which is used as the index for hybrid ARMs, was 1.80 percent Wednesday, up a basis point from seven days earlier.
A more obscure ARM index, the six-month London Interbank Offered Rate, was reported by Bankrate.com at 1.93 percent as of Wednesday. LIBOR was up 3 BPS from the previous Wednesday.
The most-recent Mortgage Market Index report had ARM share at 13.5 percent, a little more narrow than 13.6 percent a week earlier.
