Fixed rates on home loans eased this past week and could continue to drift lower. Shorter term mortgages were less attractive.
Freddie Mac reported in its Primary Mortgage Market Survey that 30-year fixed rates averaged 4.20 percent in the week ended Sept. 25.
The 30 year was down 3 basis points from the previous week and 12 BPS better than the same week last year.
Fixed rates are likely to be a little lower in the next report based on Treasury market activity.
Data reported by the Treasury Department indicated that the 10-year Treasury yield averaged 2.56 percent during the period represented by Freddie’s survey. The 10-year yield closed Thursday at 2.52 percent.
But more than two-thirds of Bankrate.com panelists for the week, Sept. 25 to Oct. 1 predicted that mortgage rates won’t move more than 2 BPS over the next week. A quarter forecasted an increase, and just 8 percent expected a decline.
Interest rates on jumbo mortgages were 4 basis points better than conforming rates in the U.S. Mortgage Market Index report from LoanSifter/Optimal Blue and Mortgage Daily for the week ended Sept. 19. The jumbo-conforming spread narrowed from a negative 9 BPS in the previous report.
A single basis-point drop in the average rate for a 15-year fixed rate left it at 3.36 percent in Freddie’s report for the week ended Sept. 18. Fifteen-year rates were 84 BPS less than 30-year rates, not quite as good as the 86-basis-point spread the prior week.
At 3.08 percent, five-year, Treasury-indexed, hybrid, adjustable-rate mortgages averaged 2 BPSÂ more than in Freddie’s previous report.
One-year ARMs averaged 2.43 percent in Freddie’s most recent survey, the same as in the last report. One-year ARMs were down 20 BPS from the week ended Sept. 26, 2014.
Behind variances in one-year ARM rates is the yield on the one-year Treasury note, which the Treasury Department reported dropped to 0.10 percent Thursday from 0.12 percent seven days earlier.
The six-month London Interbank Offered Rate — or LIBOR — remained where it’s been since June:Â 0.33 percent, according to Bankrate.com.
ARM share rose to 12.0 percent in the latest Mortgage Market Index report from 11.9 percent seven days earlier.
