A nice improvement was made on mortgage rates during the past week, and some signs are pointing to further improvement over the next week.
Freddie Mac reported in its Primary Mortgage Market Survey that 30-year fixed rates averaged 3.59 percent during the week ended April 7.
Thirty-year rates sank compared to one week earlier, when the average was 3.71 percent. They were also lower than 3.66 percent one year earlier.
“Mortgage rates this week registered the delayed impact of last week’s sharp drop in Treasury yields as the 30-year mortgage rate fell 12 basis points to 3.59 percent,” Freddie Mac Chief Economist Sean Becketti explained in the report. “This rate marks a new low for 2016 and matches last year’s low in February 2015.”
Joe Farr, who is a director at MBSQuoteline, noted in a written statement that the decline in mortgage rates was the result of Federal Reserve Chair Janet Yellen’s speech on monetary policy last week.
“Rates have stabilized since the speech, so these rates are fairly reflective of today’s rates,” Farr said.
A Mortgage Daily analysis of Treasury market activity indicates that fixed mortgage rates could be approximately 6 basis points lower in Freddie’s next report.
A plurality of panelists surveyed by Bankrate.com for the week April 7 to April 13 agreed with Mortgage Daily’s forecast and predicted rates will fall at least 3 BPS over the next week. No change was projected by 36 percent, and just 18 percent expected an increase.
But
Bankrate.com Chief Financial Analyst Greg McBride sees it differently.
“The Fed keeps hinting that they might raise rates sooner than the market expects, but the market isn’t buying it yet,” McBride said in a written statement to Mortgage Daily. “If the message starts to get through, we’ll see a bounce back in mortgage rates.”
Jumbo interest rates were 5 BPS lower than conforming rates in the U.S. Mortgage Market Index report from OpenClose and Mortgage Daily for the week ended April 1. There was no spread the previous week.
Fifteen-year fixed rates averaged 2.88 percent in Freddie’s latest report, down 10 BPS from the week ended March 31, 2016. The spread between 15- and 30-year rates
was 71 BPS, thinning from 73 BPS one week previous.
Freddie reported that five-year, Treasury-indexed, hybrid, adjustable-rate mortgages averaged 2.82 percent, tumbling from 2.90 percent seven days earlier.
The one-year Treasury-indexed ARM was 2.50 percent as of Thursday, HSH.com reported, plunging from 2.98 percent a week previous. Freddie previously reported that one-year ARMs averaged 2.46 percent in the week ended April 9, 2015.
At 0.52 percent as of Thursday, the index for the one-year ARM — the yield on the one-year Treasury note — was 7 BPS less than the previous Thursday, according to Treasury Department data.
Another, less-utilized, ARM index, the six-month London Interbank Offered Rate — or LIBOR — was 0.89 percent as of Wednesday, Bankrate.com reported. LIBOR slipped from 0.91 percent a week earlier.
ARMs accounted for
8.0 percent of all activity in the latest Mortgage Market Index report.
