Mortgage rates made a modest weekly ascension. While the long-term economic outlook has interest rates on residential loans climbing, the short-term forecast is for a sharp drop.
Thirty-year fixed rates on conforming mortgages that were utilized to finance a home purchase
and closed during January averaged 4.19 percent.
While it wasn’t much of a bump, long-term interest rates on single-family loans have ascended 2Â basis points from their reading the preceding month.
The Federal Housing Finance Agency reported the rates based on a small survey of primary home lenders.
During the
seven-day period that ended on March 1, thirty-year fixed rates averaged 4.43 percent, Freddie Mac reported in its Primary Mortgage Market Survey, climbing 3 BPS from a week earlier and 33 BPS worse than a year earlier.
Optimistic Congressional testimony from Federal Reserve Chairman Jerome Powell indicating his outlook for the economy has strengthened since December sent Treasury yields higher, according to Freddie Mac Deputy Chief Economist Len Kiefer.
In next week’s survey from Freddie, fixed rates are likely to be around 7 BPS lower than this week based on a Mortgage Daily analysis of Treasury market activity.
But a plurality of panelists surveyed by Bankrate.com for the week Feb. 28 to March 6 projected mortgage rates will rise at least 3 BPS over the next week. No change was expected by 38 percent, and just 15 percent predicted a decline.
In its February 2018 Economic & Housing Market Forecast, Freddie predicted 30-year fixed rates will average 4.3 this quarter, 4.5 percent in the second quarter and 4.6 percent three months later.
The Mortgage Bankers Association said in its
MBA Mortgage Finance Forecast that it expects 30-year rates to average 4.4 percent in the first quarter, 4.6 percent three months later and 4.7 percent in the third quarter.
Interest rates on jumbo mortgages based on the U.S. Mortgage Market Index report from Mortgage Daily and OpenClose for the week ended Feb. 23 were 18 BPS higher than conforming rates reported last week by Freddie. The spread thinned from 21 BPS in the previous report.
At 3.90 percent, average 15-year fixed rates in Freddie’s survey were 5 BPS higher than in the week ended Feb. 22, 2018.
Meantime, the spread between 15- and 30-year rates thinned to 53 BPS from 55 BPS in last week’s report.
Five-year, Treasury-indexed, hybrid, adjustable-rate mortgages averaged 3.62 percent in Freddie’s most-recent report, retreating 3 BPS on a week-over-week basis.
Freddie predicts hybrid ARMs will rise from 3.8 percent in the first quarter to 3.9 percent three months later and 4.1 percent in the third quarter.
Treasury Department data indicate that the yield on the one-year Treasury note, which is the index for hybrid ARMs, closed Thursday at 2.05 percent,
up from 2.02 percent the previous Thursday.
An index used on a shrinking number of legacy ARMs, the six-month London Interbank Offered Rate, was 2.21 percent as of Wednesday, according to Bankrate.com, soaring from 2.13 percent seven days earlier.
Still another obscure legacy ARM index is the 11th District Cost of Funds Index, which
rose to 0.777 percent in January from 0.753 percent one month earlier, according to the Federal Home Loan Bank of San Francisco.
ARM share in the latest Mortgage Market Index report was 17.9 percent, a little wider than 17.4 percent in the last report.
