While interest rates on residential loans improved last month, more recently they have ascended to the highest level in four months. The forecast is for further escalation.
Thirty-year note rates on single-family loans closed during October averaged 4.20 percent. The average improved a basis point from the previous month.
But there has been substantial deterioration in long-term mortgage rates compared to a year prior, when the average was 3.76 percent.
The rates were reported by Ellie Mae Inc.
Rates on conventional mortgages averaged 4.25 percent, while loans insured by Federal Housing Administration averaged 4.22 percent, and rates on mortgages guaranteed by Department of Veterans Affairs were 3.97 percent.
Freddie Mac reported in its Primary Mortgage Market Survey for the week ended Nov. 16 that 30-year fixed rates averaged 3.95 percent, climbing 5 basis points from the prior week to the highest level since the week ended July 20. But the 30 year was just a basis point above a year prior.
MBSQuoteline Director Joe Farr said prices of mortgage-backed securities improved since Freddie conducted its survey, indicating mortgage rates have also improved.
Half of panelists surveyed by Bankrate.com for the week Nov. 15 to Nov. 20 predicted mortgage rates won’t move more than 2 BPS over the next week. Forty percent expected a decline, and just a 10th projected an increase.
Fannie Mae predicted in its Housing Forecast: November 2017 that 30-year fixed rates will average 3.9 percent in the fourth-quarter 2017 then rise 10 BPS each of the following two quarters.
In the U.S. Mortgage Market Index report from Mortgage Daily and OpenClose for the week ended Nov. 10, jumbo rates were 13 BPS higher than conforming rates. The spread thinned from 19 BPS the preceding week.
Fifteen-year fixed rates averaged 3.31 percent in Freddie’s most-recent survey, jumping 7 BPS from the week ended Nov. 9, 2017. Interest rates on 15-year loans were
64 BPS less than 30-year rates, less than the 66-basis-point spread in the last report.
Five-year, Treasury-indexed, hybrid adjustable-rate mortgages averaged 3.21 percent in Freddie’s survey, down a basis point from a week earlier.
Hybrid ARMs are expected by Fannie to average 3.2 percent in the current quarter, 3.4 percent three months later and 3.5 percent in the second-quarter 2018.
The index for hybrid ARMs, the yield on the one-year Treasury note, closed Thursday at 1.59 percent, up 6 BPS from the prior Thursday, according to Treasury Department data.
Bankrate.com reported that the six-month London Interbank Offered Rate was 1.62 percent as of Wednesday, up 2 BPS from seven days earlier.
In the most-recent Mortgage Market Index report, ARM share was 8.3 percent, thinning from 10.0 percent the previous week.
ARM share was 5.5 percent in Ellie’s report, the same as in September and wider than 4.0 percent in October 2016. ARM share was 6.1 percent on conventional loans, 0.5 percent on FHA mortgages and 0.2 percent on VA transactions.
