Mortgage rates moved within a narrow range this past week but will likely be higher in next week’s reports. One forecast has fixed rates nearly 1 percent higher by next year.
Climbing higher for the week ended Thursday, the average 30-year fixed-rate mortgage was 4.74 percent in Freddie Mac’s survey of 125 mortgage lenders. The 30-year was 4.99 percent in the same week last year.
Fannie Mae predicted that the 30-year will be 4.9 percent this quarter then rise at least each quarter until the end of 2012 — when it is expected to reach 5.7 percent.
Mortgage rates will likely be higher in next week’s reports based on an analysis of the 10-year Treasury yield reported by the Treasury Department.
The majority of Bankrate.com panelists for the week Jan. 20 to Jan. 26 predicted that rates will not change during the next week, while 28 percent foresaw an increase and 11 percent forecasted a decline.
The interest rate on the conforming 30-year mortgage in the Mortech-Mortgage Daily Mortgage Market Index report for the week ended Wednesday was up more than the jumbo 30-year — making loans above $417,000 more competitively priced.
Unlike the 30-year in Freddie’s report, the 15-year fell from last week to 4.05 percent.
At 3.25 percent, the one-year Treasury-indexed adjustable-rate mortgage was slightly higher than a week earlier but much better than the same week last year. The one year will average 3.5 percent during the first quarter, according to Fannie’s forecast, then steadily rise to 4.3 percent by the end of next year.
Consumers chose an ARM 5.0 percent of the time in the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ended Jan. 14, a tad higher than 4.9 percent the previous week.
Mortgage shoppers slowed their activity, with the Mortgage Market Index slipping to 209 from the prior week’s 223. Consumers seeking a refinance represented a little more than half of the activity.
Fannie projected that refinance share based on originations will be 59 percent this quarter then slide to 29 percent by the end of the year.