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Mortgage Rates, ARM Indices Fall

Mortgage rates and multiple adjustable-rate mortgage indices moved lower over the past week on global concerns. Rates rose, however, over the past month.

Interest rates on single-family loans with conforming amounts that were used to finance a home purchase averaged 4.64 percent during April.

The average, based on a
small survey conducted by the Federal Housing Finance Agency, escalated by 10 basis points from one month prior.

LendingTree reported that mortgage borrowers saved an average of 62 BPS when they shopped around for a loan in the week ended May 27.

In the seven days that ended May 31, thirty-year fixed rates averaged
4.56 percent in Freddie Mac’s Primary Mortgage Market Survey. Rates tumbled 10 BPS from the preceding week.

“The decline was driven by recent trade and geopolitical issues, which led to a sudden decrease in long-term Treasury yields,” Freddie Mac Chief Economist Sam Khater said in a written statement.

But the average 30 year has surged by 62 BPS during the same-seven days last year.

A plurality of panelists, 38 percent, surveyed by for the week May 30 to June 5 predicted mortgages rates won’t move more than 2 BPS over the next week. The remaining 62 percent were evenly split over whether rates would rise or fall.

In the U.S. Mortgage Market Index report from Mortgage Daily and OpenClose for the week ended May 25, interest rates on jumbo loans were 6 BPS higher than conforming rates. The spread was slashed from 17 BPS one week previous.

Fifteen-year fixed rates averaged 4.06 percent in Freddie’s survey, a 9-basis-point improvement from the week ended May 24. At 50 BPS, the spread between 15- and 30-year rates thinned from 51 BPS in the last report.

Freddie reported that five-year, Treasury-indexed, hybrid adjustable-rate mortgages averaged 3.80 percent, dropping 7 BPS.

Hybrid ARM rates adjust based on the one-year Treasury yield, which the Treasury Department reported closed at 2.23 percent Thursday, falling 5 BPS from the preceding Thursday.

The six-month London Interbank Offered Rate fell to 2.47 percent Wednesday from 2.50 percent seven days earlier, reported.

1.72 percent as of Wednesday, the Secured Overnight Financing Rate was 5 BPS better than the previous Wednesday, according to the Federal Reserve Bank of New York.

Most recently in the Mortgage Market Index report, ARM share was 16.8 percent, not much different than 16.7 percent the prior week.

The 11th District Cost of Funds Index was reported by the Federal Home Loan Bank of San Francisco at 0.895 percent as of April, climbing from 0.814 percent in March.

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