Long-term mortgage rates worsened over the past week. Both short- and long-term forecasts have interest rates on single-family loans climbing even further.
Thirty-year fixed rates on conventional, conforming mortgages that are used to finance a home purchase averaged 4.14 percent in September.
The average improved compared to the preceding month, when it worked out to 4.19 percent. In September 2016, the average was 3.73 percent.
The Federal Housing Finance Agency, which regulates Fannie Mae and Freddie Mac, reported the rates based on a small survey of home lenders.
In its Primary Mortgage Market Survey, Freddie found that 30-year fixed rates averaged 3.94 percent in the seven days ended Oct. 26 — the highest it’s been since it was 3.96 percent in the week ended July 20. The average jumped 6 basis points from the previous report and leapt 47 BPS from the same seven days last year.
Rates have worsened since Freddie finished its survey, according to MBSQuoteline Director Joe Farr, who noted in a written statement that prices on mortgage-backed securities have deteriorated.
A Mortgage Daily analysis of Treasury market activity suggests that fixed rates could be around 5 BPS worse in Freddie’s next survey.
A majority of panelists surveyed by Bankrate.com for the week Oct. 25 to Nov. 1 agreed with Mortgage Daily’s forecast and predicted mortgage rates will increase at least 3 BPS over the next week. No change was expected by 38 percent, and just 8 percent projected a decline.
Freddie predicted in its October 2017 Economic & Housing Market Forecast that 30-year fixed rates will average 3.9 percent in the fourth quarter and 4.4 percent for all of next year.
The MBA Mortgage Finance Forecast from the Mortgage Bankers Associate has 30-year fixed rates climbing from 4.1 percent this quarter to 4.3 percent in the first-quarter 2018 and 4.6 percent three months later.
In
the U.S. Mortgage Market Index report from Mortgage Daily and OpenClose for the week ended Oct. 20, interest rates on jumbo mortgages were 15 BPS higher than conforming rates. The spread widened from 12 BPS the previous week.
In Freddie’s survey, 15-year fixed rates averaged 3.25 percent. Like the 30 year, 15-year rates moved up 6 BPS from the week ended Oct. 19.
Fifteen-year rates were 69 BPS less than 30-year rates, the same as in the last report.
Five-year, Treasury-indexed, hybrid, adjustable-rate mortgages averaged 3.21 percent in Freddie’s most-recent survey, 4 BPS higher than last week.
Freddie’s outlook has hybrid ARMs averaging 3.1 percent in the current quarter and 3.7 percent for all of next year.
The index for hybrid ARMs, the yield on the one-year Treasury note, closed at 1.43 percent Thursday, up 2 BPS from the preceding Thursday, according to the Department of the Treasury.
The six-month London Interbank Offered rate was reported by Bankrate.com at 1.56 percent as of Wednesday. LIBOR, which is utilized as an index on some legacy ARMs, was up a single basis point from seven days earlier.
ARM share
was 12.3 percent in the most-recent Mortgage Market Index report, wider than 10.0 percent in the previous report.
