Over the past seven days, fixed mortgage rates were slightly lower. More of the same could be in store for the next seven days. While a longer-term increase is forecasted, little change is expected next year.
In its Primary Mortgage Market Survey for the week ended Aug. 23, Freddie Mac reported that the average 30-year fixed rate on a new residential loans was 4.51 percent.
Thirty-year fixed rates are likely to be around the same, maybe a basis point or so lower in Freddie’s next survey, according to an analysis of Treasury market data by Mortgage Daily.
Sixty-percent of panelists surveyed by Bankrate.com for the week Aug. 22 to Aug. 28 concurred with Mortgage Daily’s outlook and predicted rates won’t move more than 2 BPS during the next week. A fifth predicted a decline, and another fifth expected an increase.
Fannie Mae predicted in its Housing Forecast: August 2018 that 30-year fixed rates will average 4.6 percent this quarter and in the fourth quarter. The rate is expected to average 4.7 percent each quarter of next year.
Another forecast from the Mortgage Bankers Association, the MBA Mortgage Finance Forecast, has the 30 year averaging 4.6 percent in the current quarter, 4.8 percent in the final three months of this year, and 4.9 percent in the first quarter of next year.
In the U.S. Mortgage Market Index report from Mortgage Daily and OpenClose for the week ended Aug. 17, jumbo interest rates were 10 BPS higher than conforming rates. The spread thinned from 13 BPS the prior week.
Freddie reported average 15-year fixed rates at 3.98 percent, improving 3 BPS from the week ended Aug. 16. At
53 BPS, the spread between 15- and 30-year rates widened from 52 BPS in the last report.
A 5-basis-point decline was recorded by Freddie for five-year, Treasury-indexed, hybrid adjustable-rate mortgages, leaving the average at 3.82 percent.
Hybrid ARMs are expected to average 3.9 percent in the third quarter, 4.0 percent three months later, and 4.1 percent in the first-quarter 2019.
The index for hybrid ARMs, the yield on the one-year Treasury note, closed Thursday at 2.43 percent, the Department of the Treasury reported. The yield was 2 BPS lower than the previous Thursday.
Bankrate.com reported that the six-month London Interbank Offered Rate was 2.51 percent as of Wednesday. LIBOR, which is used as an index for some legacy ARMs, was unchanged from the preceding Wednesday.
What did change, however, was the Secured Overnight Financing Rate, which the Federal Reserve Bank of New York reported 1.90 percent as of yesterday, tumbling 8 BPS from seven days earlier.
ARM share in the most-recent MMI report was 20.0 percent, wider than 16.2 percent a week earlier.