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Mortgage Rates Dip, Volatile Week Ahead

Fixed interest rates on home loans moved lower this past week, and a key government report tomorrow could significantly impact upcoming rates. Several adjustable-rate indices retreated.

Thirty-year fixed rates averaged 4.55 percent in Freddie Mac’s Primary Mortgage Market Survey for the week ended May 3.

Compared to the preceding week, the 30 year declined 3 basis points. But long-term mortgage rates still stand well above 4.02 percent as of the same seven days last year.

No change in mortgage rates over the next week was expected by a plurality of panelists surveyed by Bankrate.com for the week May 2 to May 8. A third predicted rates will rise at least 3 BPS, and just 22 percent projected a decline.

Movement over the next week will be impacted by tomorrow’s employment report. Strong data could push rates higher, while a weak report could pull down rates.

In the U.S. Mortgage Market Index report from Mortgage Daily and OpenClose for the week ended April 27, jumbo interest rates were 17 BPS higher than conforming rates reported last week by Freddie. The spread widened from 16 BPS one week previous.

Freddie reported average 15-year fixed rates at 4.03 percent, just a single basis point higher than in the week ended April 26, 2018. Fifteen-year rates were 52 BPS better than 30-year rates versus 56 BPS in the last report.

Five-year, Treasury-indexed, hybrid adjustable-rate mortgages averaged 3.69 percent, down 5 BPS from the preceding week.

Hybrid ARMs adjust based on the yield on the one-year Treasury note, which the Department of the Treasury reported at 2.24 percent as of Thursday, down a basis point from seven days earlier.

Bankrate.com published the six-month London Interbank Offered Rate at 2.51 percent as of Wednesday, down a basis point from the previous Wednesday.

The Federal Reserve Bank of New York said that the
Secured Overnight Financing Rate was 1.75 percent as of yesterday, up from 1.71 percent last Wednesday.

The 11th District Cost of Funds Index was reported by the Federal Home Loan Bank of San Francisco at
0.814 percent as of March, off from 0.816 percent in February.

ARM share was 14.9 percent in the latest Mortgage Market Index report, thinning from 15.1 percent the preceding week.

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