Interest rates on single-family loans retreated this past week. It’s possible, however, that mortgage rates could bounce back up in the next report.
Fixed interest rates on 30-year mortgages that were used to finance the purchase of single-family residences averaged 4.15 percent in June.
The average, which reflects
conforming rates, was worse than the preceding month, with 30-year rates ascending 18 basis points from May.
The latest monthly reading was provided by the Federal Housing Finance Agency based on a small survey of home lenders.
Freddie Mac, which is regulated by FHFA, reported in its Primary Mortgage Market Survey for the week ended July 27 that 30-year fixed rates averaged 3.92 percent.
That was a 4-basis-point improvement from the previous week but 44 BPS worse than in the same week last year.
Freddie Mac Chief Economist Sean Becketti noted in the report that where rates land in next week’s survey depends on how the market reacts to the Federal Reserve’s statement about unwinding its balance sheet.
So far it appears the Fed’s disclosure has pushed up rates. A Mortgage Daily analysis of Department of the Treasury data indicates that fixed rates could be around 3 BPS worse in next week’s report.
No change in mortgage rates was predicted by a plurality of panelists surveyed by Bankrate.com for the week July 26 to Aug. 1. A third expected a decline of at least 3 BPS, and a quarter projected an increase.
Freddie predicted in its
July 2017 Economic & Housing Market Forecast that 30-year fixed rates will average 3.9 percent this quarter and also in the fourth quarter.
The Mortgage Bankers Association’s
MBA Mortgage Finance Forecast has 30-year fixed rates averaging 4.3 percent during the current quarter, 4.5 percent in the fourth quarter and 4.7 percent in the first quarter of next year.
Interest rates on jumbo mortgages were 7 BPS higher than conforming rates in the U.S. Mortgage Market Index report from Mortgage Daily and OpenClose for the week ended July 21, thinning from a 10-basis-point spread a week prior.
McLean, Virginia-based Freddie said 15-year fixed rates averaged 3.20 percent, 3 BPS better than in the week ended July 20. Fifteen-year rates were 72 BPS lower than 30-year rates, slightly thinner than the 73-basis-point spread a week earlier.
At 3.18 percent — five-year, Treasury-indexed, hybrid, adjustable-rate mortgages were down 3 BPS in Freddie’s survey.
Freddie expects hybrid ARMs to average 3.1 percent in both the third and fourth quarters.
Treasury Department data indicate that the yield on the one-year Treasury note, which is used as the index on hybrid ARMs, closed Thursday at 1.22 percent, no different than seven days earlier.
The six-month London Interbank Offered Rate, which is being scrapped and replaced in 2021, was 1.45 percent Wednesday, Bankrate.com reported. That was a basis point less than in the last report.
ARM share in the
most current Mortgage Market Index report was 9.8 percent, no different than in the preceding report.
