Long-term rates on home loans moved lower over the past week, and it’s quite possible that the next week could see a similar improvement.
Thirty-year fixed rates averaged 3.92 percent in Freddie Mac’s Primary Mortgage Market Survey for the seven days ended Nov. 22.
Long-term residential rates retreated 3 basis points compared to the preceding week and were 11 BPS lower versus the same seven days last year.
Joe Farr, director at MBSQuoteline, said in a written statement that a nice improvement in prices on mortgage-backed securities had mortgage rates down around 3 BPS since Freddie collected the data for its survey.
An analysis of Treasury market activity by Mortgage Daily suggests that fixed rates could be around 5 BPS lower in Freddie’s next survey.
A majority of panelists surveyed by Bankrate.com for the week Nov. 21 to Nov. 28 expected rates won’t move more than 2 BPS over the next week. A third predicted an increase, and just 11 percent forecasted a decline.
Economists at McLean, Virginia-based Freddie predicted in its November 2017 Economic & Housing Market Forecast that 30-year fixed rates will average 3.9 percent this quarter, 4.1 percent in the first-quarter 2018 and 4.3 percent three months later.
The Mortgage Bankers Association’s
MBA Mortgage Finance Forecast has 30-year fixed rates climbing from 4.0 percent in the fourth-quarter 2017 to 4.3 percent three months later and 4.5 percent in the second-quarter 2018.
Jumbo mortgages were priced 3 BPS higher than conforming rates in the U.S. Mortgage Market Index report from Mortgage Daily and OpenClose for the week ended Nov. 17, far less than the 13 BPS the prior week.
Freddie’s survey had 15-year fixed rates at 3.32 percent, a basis point higher than in the week ended Nov. 16. The spread between 15- and 30-year mortgages thinned to
60 BPS from 64 BPS in the last report.
Five-year, Treasury-indexed, hybrid, adjustable-rate mortgages averaged 3.22 percent, Freddie reported, a basis point higher than last week’s report.
Hybrid ARMs are expected by Freddie to average 3.1 percent in the current quarter, 3.3 percent in the first-three months of next year and 3.6 percent in the second-quarter 2018.
Treasury Department data indicate the yield on the one-year Treasury note closed Tuesday at 1.62 percent. The one-year yield is used as an index for hybrid ARMs.
At 1.63 percent as of Tuesday, the six-month London Interbank Offered Rate was a basis point higher than last week, Bankrate.com reported. LIBOR is the index on some legacy ARMs.
ARM share in the latest Mortgage Market Index report was 10.8 percent, much wider than 8.3 percent a week earlier.
