Mortgage rates bounced off last week’s 2014 lows as optimism increased about the labor market and the Federal Reserve moved forward with its plans to end its quantitative easing strategy.
Thirty-year fixed rates averaged 3.98 percent in Freddie Mac’s Primary Mortgage Market Survey for the week ended Oct. 30.
The 30 year climbed 6 basis points from last week, when it fell to the lowest level this year, but was 12 BPS better than in the same week last year.
Influencing rate activity over the past week were a strong new home sales report and an 0.4 percent increase in the S&P Case-Shiller House Price Index, according to Freddie Mac Chief Economist Frank Nothaft.
The Federal Open Market Committee issued a statement Thursday indicating that with economic activity expanding at a moderate pace, solid job gains and a lower unemployment rate — it will move forward with its plan to stop increasing its holdings of agency mortgage-backed securities after this month.
The Fed did note, however, that it will continue to reinvest principal repayments from its existing investments into agency MBS.
For all of September, conforming 30-year fixed rates averaged 4.31 percent, the Federal Housing Finance Agency — which regulates Freddie — reported. A month earlier, the average was 4.33 percent.
Fixed rates will probably not be too different in Freddie’s next report based on Treasury market activity this week.
Fixed mortgage rates tend to move with the 10-year Treasury yield, which — based on Treasury Department data — averaged 2.30 percent during the days Freddie surveyed lenders and closed Thursday at 2.32 percent.
A majority of panelists surveyed by Bankrate.com for the week Oct. 30 to Nov. 5 agreed with Mortgage Daily’s forecast and predicted mortgage rates will not move more than 2 BPSÂ over the next week. Another 36 percent projected an increase, and just 9 percent expected a decline.
Jumbo rates were 3 BPS higher than conforming rates in the U.S. Mortgage Market Index from LoanSifter/Optimal Blue and Mortgage Daily for the week ended Oct. 24, swinging from a negative jumbo-conforming spread of 5 BPS the previous week.
At 3.13 percent, 15-year fixed rates were 5 BPS worse than in Freddie’s previous report. Fifteen-year mortgages were slightly more appealing this week at 85 BPS less than 30-year rates versus the spread of 84 BPS in the last survey.
Freddie reported five-year, Treasury-indexed, hybrid, adjustable-rate mortgages at an average of 2.94 percent, up 3 BPS from seven days earlier.
One-year Treasury-indexed ARMs averaged 2.43 percent, Freddie said, 2 BPS worse than in the prior report but 8 BPS better than in the year-earlier report.
The one-year Treasury yield, which is utilized to determine rate and payment changes on one-year ARMs, was 0.11 percent — where it has been each trading day since Oct. 22, according to the Treasury Department.
No change from last week left the six-month London Interbank Offered Rate at 0.32 percent on Wednesday, Bankrate.com reported.
ARM share fell to 11.7 percent in the most-recent Mortgage Market Index from 12.1 percent seven days earlier.
