After falling to the lowest levels this year, fixed mortgage rates further retreated. The outlook for the next interest rate report is for no further declines.
Average 30-year note rates on residential loans closed during March were 4.39 percent, up from 4.36 percent a month earlier and 4.12 percent a year earlier.
Last month’s average was 4.50 percent on conventional loans, 4.32 percent on Federal Housing Administration-insured loans and 4.10 percent on Department of Veterans Affairs loans.
Ellie Mae Inc. reported the rates in its Origination Insight Report | March 2017.
More recently, Freddie Mac reported in its Primary Mortgage Market Survey for the week ended April 20 that 30-year fixed rates averaged 3.97 percent — the lowest average since the week ended Nov. 17, 2016.
“Weak economic data and growing international tensions are driving investors out of riskier sectors and into Treasury securities,” Freddie Mac Chief Economist Sean Becketti said in the report. “This shift in investment sentiment has propelled rates lower.”
The 30 year was 4.08 percent a week earlier and 3.59 percent a year earlier.
But MBSQuoteline’s Joe Farr noted in a written statement to Mortgage Daily that mortgage-backed securities prices have fallen since Freddie conducted its survey — indicating that mortgage rates are worse.
A Mortgage Daily analysis of Treasury market activity suggests fixed rates might be around 2 to 3 basis points worse in Freddie’s next survey.
Thirty-eight percent of panelists surveyed by Bankrate.com for the week April 20 to April 26, however, predicted rates will decline at least 3 BPS over the next week, while another 38 percent expected no changes. Less than a quarter projected an increase.
Freddie predicted in its
April 2017 Economic & Housing Market Forecast that 30-year fixed rates will average 4.4 percent this quarter and 4.5 percent during the following two quarters.
Rival Fannie Mae projected in its Housing Forecast: April 2017 that the 30 year will average 4.2 percent in the second quarter and the following quarter then rise to 4.3 percent in the fourth quarter.
In the MBA Mortgage Finance Forecast from the Mortgage Bankers Association, 30-year rates are expected to go from 4.3 percent during the current quarter to 4.4 percent in the third quarter and 4.6 percent three months later.
Jumbo rates were 8 BPS less than conforming rates in the U.S. Mortgage Market Index report from Mortgage Daily and OpenClose for the week ended April 14. The spread thinned from 10 BPS the previous week.
Freddie said 15-year fixed rates averaged 3.23 percent, tumbling from 3.34 percent the prior week. The spread between 15- and 30-year rates
remained at 74 BPS.
At 3.10 percent, average rates on five-year, Treasury-indexed, hybrid, adjustable-rate mortgages
fell 8 BPS from the week ended April 13, 2017.
Freddie expects hybrid ARMs to climb from 3.5 percent this quarter to 3.6 percent during the following two quarters.
Fannie’s forecast has hybrid ARMs going from 3.3 percent in the second quarter to 3.4 percent three months later and 3.5 percent in the fourth quarter.
Rates on hybrid ARMs adjust based on the one-year Treasury note yield, which closed Thursday at 1.01 percent, down from 1.03 percent seven days earlier, according to Treasury Department data.
The six-month London Interbank Offered Rate, which also serves as an ARM index, was 1.40 percent Wednesday, according to Bankrate.com. LIBOR was down from 1.42 percent the previous Wednesday.
The most-recent Mortgage Market Index report had ARM share at 11.0 percent, wider than 8.4 percent the prior week.
ARM share was
5.6 percent last month, Ellie reported, widening from 5.3 percent in February and 4.4 percent in March 2016.
