Mortgage rates moved higher this past week, leaving long-term fixed rates above 4 percent. Rates might rise further, though employment numbers could change that. Fifteen-year rates surged.
A 4-basis point increase from last week left 30-year fixed rates averaging 4.02 percent in Freddie Mac’s Primary Mortgage Market Survey for the week ended Nov. 11.
But fixed interest rates on home loans still sat below the their levels as of a year earlier, with a year-over-year improvement of 14 BPS.
“The rate increases coincide with real GDP beating consensus expectations of 3.0 percent growth by growing at an annualized rate of 3.5 percent in the third quarter,” Freddie Mac Chief Economist Frank Nothaft observed in the report. “The ISM Manufacturing Index also beat expectations registering 59 in October, up from September’s reading of 56.6.”
Treasury market activity suggests that fixed rates will be around 3 BPS higher in next week’s report from Freddie. Data from the Department of the Treasury indicate that the 10-year Treasury yield — a benchmark for fixed mortgage rates — averaged 2.36 percent during the period covered by Freddie’s survey and closed Friday at 2.39 percent.
Rates won’t move more than 2 BPS according to 81 percent of panelists surveyed by Bankrate.com for the week Nov. 6 to Nov. 12. Another 19 percent predicted an increase and none forecasted a decline.
However, Friday’s employment report could send rates lower if fewer than 200,000 jobs were added during October.
Jumbo mortgage rates were 4 BPS more than conforming rates in the U.S. Mortgage Market Index report from LoanSifter/Optimal Blue and Mortgage Daily for the week ended Oct. 31. The jumbo-conforming spread inched wider from 3 BPS one week prior.
Freddie’s report had 15-year fixed rates averaging 3.21 percent, surging 8 BPS from the week ended Oct. 30. The spread between 15- and 30-year mortgages was reduced to 81 BPS from 85 BPS seven days prior.
At 2.97 percent, there was a 3-basis-point increase in average rates for five-year, Treasury-indexed, hybrid, adjustable-rate mortgages, Freddie reported.
At 2 BPS worse than in Freddie’s previous survey, one-year Treasury-indexed ARMs averaged 2.45 percent. One-year ARMS have retreated 16 BPSÂ from the week ended Nov. 7, 2013.
The yield on the one-year Treasury note, which determines rate and payment changes on many ARMs, was 0.12 percent as of Thursday, the Treasury Department reported, up a basis point from a week earlier.
The London Interbank Offered Rate average 0.33 percent as of Wednesday, a basis point higher than seven days earlier, Bankrate.com reported.
ARM share was 10.8 percent in the latest Mortgage Market Index report, thinning from 11.7 percent the previous week.
