Mortgage rates turned lower this past week and could see a further decline next week unless tomorrow’s jobs report turns out strong.
Thirty-year fixed rates averaged 3.43 percent in Freddie Mac’s Primary Mortgage Market Survey for the week that ended on Aug. 4.
That was the lowest level for 30-year fixed interest rates since the week ended July 14, when Freddie reported the average at 3.42 percent.
The 30 year averaged 3.48 percent in the last report and 3.91 percent in the year-earlier report.
“Treasury yields fell last week following both the FOMC’s meeting and a disappointing advance estimate for second quarter GDP,” Freddie Mac Chief Economist Sean Becketti said in the report. “Mortgage rates, which had moved up 7 basis points over the past three weeks, responded by erasing most of those gains, falling 5 BPS to 3.43 percent this week for the 30-year fixed-rate mortgage.”
Joe Far, director at MBSQuoteline, noted in a written statement to Mortgage Daily that further improvement has taken place in mortgage rates.
“Again this week, MBS prices have improved from Monday and Tuesday when the Freddie Mac rate survey was being conducted,” Farr stated. “As a result, mortgage rates on Thursday are a little better than what is shown in the survey.”
A Mortgage Daily analysis of Treasury market data is pointing to a decline of around 3 basis points or so in fixed rates over the next week.
But Mortgage Daily’s forecast could be upended if tomorrow’s employment report reveals that more than 200,000 jobs were added during July.
Bankrate.com Chief Financial Analyst Greg McBride expects rates to drift aimlessly for a while.
“The market isn’t buying into the idea of a Fed rate increase in September, so expect more yo-yoing up and down,” McBride said in a written statement to Mortgage Daily.
A majority of Bankrate.com panelists surveyed for the week Aug. 3 to Aug. 9 don’t expect mortgage rates to move more than 2 BPS over the next week. An increase was predicted by 38 percent, and only 8 percent expected a decline.
In the U.S. Mortgage Market Index report from OpenClose and Mortgage Daily for the week that ended on July 29, rates on jumbo mortgages were 15 BPS more than conforming rates, thinning from 18 BPS in the report from a week previous.
A 4-basis-point decline from the week ended July 28 left 15-year fixed rates at 2.74 percent in Freddie’s latest survey. Fifteen-year rates
were 69 BPS lower than 30-year rates, not quite as good as the 70-basis-point spread in the week-earlier report.
Freddie reported that five-year, Treasury-indexed, hybrid, adjustable-rate mortgages averaged 2.73 percent, 5 BPS better than a week prior.
A 13-basis-point improvement from seven days earlier left one-year ARMs at 2.54 percent as of Thursday, HSH.com reported. One-year ARMs averaged 2.54 percent in the week ended Aug. 6, 2015, according to data previously reported by Freddie.
At 0.51 percent as of Thursday, the index for the one-year ARM — the yield on the one-year Treasury note — was 2 BPS lower than
seven days prior, the Department of the Treasury reported.
Another ARM index, the six-month London Interbank Offered Rate, was 1.13 percent as of Wednesday,
climbing from 1.07 percent a week earlier, Bankrate.com reported.
The latest Mortgage Market Index report indicated that ARM share widened to 7.1 percent from 6.0 percent in the prior report.
