Fixed mortgage rates moved higher this past week. But multiple short-term and long-term forecasts have fixed rates remaining where they are now for months.
Residential loans that were closed during September 2016 had an average 30-year note rate of 3.75 percent -- the lowest monthly average since May 2013.
Mortgage rates averaged 3.77 percent in
August 2016, while interest rates were much higher in September 2015, a month when they stood at 4.28 percent.
Those statistics are based on the September 2016 Origination Insight Report from Ellie Mae Inc.
Conventional mortgage rates averaged
3.81 percent last month, according to Ellie. Rates on loans insured by the Federal Housing Administration averaged 3.73 percent, and mortgages guaranteed by the Department of Veterans Affairs had an average rate of 3.52 percent.
During the week ended Oct. 20, 2016, thirty-year fixed rates averaged 3.52 percent in Freddie Mac's Primary Mortgage Market Survey. The average was up from 3.47 percent the prior week and 3.79 percent a year prior.
"This month, mortgage rates seem to be catching up to Treasury yields and returning to pre-Brexit levels," Freddie Mac Chief Economist Sean Becketti said in the report.
Joe Farr, director at MBSQuoteline, said in a written statement to Mortgage Daily that prices on mortgage-backed securities have improved since Freddie conducted its survey, indicating that mortgages rates are a little lower than reported by Freddie.
There is little chance that fixed mortgages rates will be much different in Freddie's next weekly survey based on an analysis of Treasury market activity by Mortgage Daily.
Two-thirds of panelists surveyed by Bankrate.com for the week Oct. 20 to Oct. 26 agreed with with Mortgage Daily's forecast that rates won't move. An increase of at least 3 BPS was predicted by 22 percent of the panelists, while 11 percent expected a decline.
On a longer-term basis, Fannie Mae predicted in its Housing Forecast: October 2016 that 30-year fixed rates will average 3.5 percent this quarter and the first-three quarters of next year.
Freddie projected in its
October 2016 Economic & Housing Market Forecast that 30-year fixed rates will average 3.6 percent from the fourth-quarter 2016 through the second-quarter 2017.
Interest rates on jumbo mortgages were
11 BPS more than conforming rates in the U.S. Mortgage Market Index report from OpenClose and Mortgage Daily for the week ended Oct. 14. The jumbo-conforming spread widened from 8 BPS one week earlier.
Freddie's survey had 15-year fixed rates averaging 2.79 percent, 3 BPS more than in the week ended Oct. 13. The spread between 15- and 30-year rates widened to 73 BPS from
71 BPS in the last report.
Five-year, Treasury-indexed, hybrid, adjustable-rate mortgages averaged 2.85 percent in Freddie's report, rising from 2.82 percent a week prior.
Fannie expects hybrid ARMs to average 2.9 percent during the current quarter and the first-quarter 2017 then spend the rest of next year at 3.0 percent.
Freddie predicts the 5/1 hybrid ARM will average 3.2 percent in the fourth quarter and the following three months then rise to 3.3 percent in the second-quarter 2017.
One-year Treasury-indexed ARMs were 2.82 percent as of Thursday, HSH.com reported. One-year ARMs were 2.80 percent a week earlier.
In the week
ended Oct. 22, 2015, Freddie previously reported that one-year ARMs averaged 2.62 percent.
The yield on the one-year Treasury note, which serves as an index for one-year ARMs, closed at 0.66 percent Thursday, the same as seven days earlier, the Department of the Treasury reported.
Bankrate.com reported that the six-month London Interbank Offered Rate was 1.26 percent as of Wednesday. LIBOR, which is utilized as an index on a small share of legacy ARMs, didn't change from the prior Wednesday.
Ellie reported that ARM share was trimmed to 4.0 percent last month from 4.1 percent in August and cut from 5.3 percent in September 2015.
The most-recent Mortgage Market Index report had ARM share at 5.5 percent, thinner than 6.9 percent the prior week.