Last month, interest rates on single-family loans fell to their lowest level since last year. In addition, there was a nice week-over-week improvement in long-term rates.
Thirty-year note rates averaged 4.21 percent on residential loans that were closed in September. That was the lowest average since it was 4.05 percent in December 2016.
Mortgage rates averaged 4.27 percent in August 2017. But 30-year note rates were worse than in September of last year, when the average was just 3.75 percent.
The rates were reported in Ellie Mae Inc.’s
September 2017 Origination Insight Report.
Conventional mortgages rates averaged 4.26 percent last month in Ellie’s report. Loans insured by the Federal Housing Administration had an average rate of 4.23 percent, while the average was 3.99 percent on mortgages guaranteed by the Department of Veterans Affairs.
During just the seven days ended Oct. 19, thirty-year fixed rates averaged 3.88 percent, Freddie Mac reported in its Primary Mortgage Market Survey. Long-term mortgage rates eased 3 basis points from the preceding week. But the average was still higher than 3.52 percent a year ago.
Joe Farr, who is a director at MBSQuoteline, said in a written statement that mortgage rates have worsened a little since Freddie completed its survey.
“MBS prices dropped on Wednesday as the stock market saw nice gains,” Farr stated.
“Most surveys missed this drop in prices and the corresponding rise in mortgage rates.”
Mortgage Daily’s analysis of Treasury market activity indicates that fixed rates are unlikely to be much different next week — perhaps a couple BPS higher.
Half of panelists surveyed by Bankrate.com for the week Oct. 18 to Oct. 25 agreed with Mortgage Daily and predicted rates won’t move more than 2 BPS over the next week. An increase was expected by 29 percent, and 21 percent forecasted a decline.
Fannie Mae predicted in its Housing Forecast October 2017 that 30-year fixed rates will rise from 3.9 percent this quarter to 4.0 percent during the first and second quarters of next year.
The U.S. Mortgage Market Index report from Mortgage Daily and OpenClose for the week ended Oct. 13 had jumbo rates at 12 BPS higher than conforming rates, the same as the previous week.
Freddie’s survey had 15-year fixed rates averaging
3.19 percent, dipping 2 BPS from the week ended Oct. 12. Fifteen-year rates were 69Â BPS less than 30-year rates. The spread thinned from 70 BPS in the last report.
Five-year, Treasury-indexed, hybrid adjustable-rate mortgages averaged 3.17 percent, up a basis point from a week prior.
Hybrid ARMs are expected by Fannie to average 3.3 percent in the fourth-quarter 2017 then rise 10 BPS each of the following two quarters.
At 1.41 percent as of Thursday, the yield on the one-year Treasury note — which is used to determine rate changes on hybrid ARMs — was the same as the previous Thursday.
Another ARM index, the six-month London Interbank Offered Rate, was 1.55 percent as of Wednesday, according to Bankrate.com. LIBOR climbed 3 BPS from seven days earlier.
In Ellie Mae’s report, ARM share was 5.5 percent last month, thinning from 5.7 percent in August but widening from 4.0 percent in September 2016. September’s ARM share was 6.2 percent on conventional loans, 0.6 percent on FHA mortgages and 0.2 percent on VA loans.
ARM share in the Mortgage Market Index report widened to 10.0 percent from 9.7 percent the previous week.
