Mortgage Daily Logo
mortgage news from industry experts

Mortgage Rates Little Changed, More of Same Ahead

Over the past week, there was little change in interest rates on home loans. During the next week, more of the same is likely. Recently rising rates have helped the Federal Home Loan Banks’ earnings.

Conventional mortgages with conforming loan amounts used to finance the purchase of a single-family property had an average 30-year fixed rate of 4.77 percent in July.

The monthly average was up just a single basis point versus the preceding month.
But long-term mortgage rates have significantly increased versus July 2017, when they averaged 4.14 percent.

Reporting the rate was the Federal Housing Finance Agency, which derived its findings from a small survey of primary lenders.

As interest rates have been on the rise this year, the FHLBs have seen earnings improve by
$173 million during the first half of this year, according to Moody’s Investors Service. The net interest margin at the FHLBs rose 9 BPS to 0.47 percent.

Freddie Mac, which is regulated by FHFA, reported in its Primary Mortgage Market Survey for the week ended Aug. 30 that 30-year fixed rates averaged 4.52 percent. There wasn’t much change from 4.51 percent a week ago, but the 30 year has soared 70 BPS from a year earlier.

Mortgage Daily’s analysis of Treasury market data suggests that fixed rates could be approximately the same in next week’s survey from Freddie.

Less than half of panelists surveyed by Bankrate.com for the week Aug. 29 to Sept. 4 agreed with Mortgage Daily and predicted no change in mortgage rates over the next week. Forty percent foresaw an increase of at least 3 BPS, and 13 percent predicted a decline.

Freddie predicted in its August 2018 Economic & Housing Market Forecast that 30-year rates will average 4.6 percent this quarter and 4.8 percent in the fourth quarter.

Jumbo interest rates were
12 BPS higher than conforming rates in the U.S. Mortgage Market Index report for the week ended Aug. 24 from Mortgage Daily and OpenClose. The spread widened from 10 BPS a week prior.

At 3.97 percent, 15-year fixed rates in Freddie’s survey were a basis point lower than in the week ended Aug. 23. Fifteen-year rates were 55 BPS higher than 30-year rates, widening from 53 BPS a week ago.

Freddie reported that five-year, Treasury-indexed, hybrid adjustable-rate mortgages averaged 3.85 percent, 3 BPS higher than in the previous survey.

Hybrid ARMs are forecasted by Freddie to average 3.9 percent in the third quarter and 4.1 percent the following three months.

Interest rates on hybrid ARMs adjust based on the one-year Treasury note yield, which was closed Thursday at 2.47 percent, jumping 4 BPS from the prior Thursday, according to Treasury Department data.

The six-month London Interbank Offered Rate, which acts as an index for some legacy ARMs, was reported by Bankrate.com at 2.53 percent as of Wednesday, up 2 BPS from the preceding Wednesday.

The
Secured Overnight Financing Rate, which is set to replace LIBOR, was 1.93 percent as of yesterday, rising 3 BPS from seven days earlier, according to the Federal Reserve Bank of New York.

ARM share was 17.6 percent in the most-recent Mortgage Market Index report, thinner than a fifth a week previous.

Popular posts

How Long Does It Take to Refinance a Mortgage
How Long Does It Take to Refinance a Mortgage

So, you’re interested in refinancing your mortgage. Maybe you want some extra capital to do that home project you’ve always dreamed of, interest rates are nearing record lows, or you want to start consolidating debt. Regardless of the motivation behind the refinance,...

How Does Refinancing a Mortgage Work
How Does Refinancing a Mortgage Work

A home purchase is considered an investment, and a robust one at that. Savvy owners are constantly looking for new ways to reduce debt, save money, pay less in interest, and ultimately build equity. Refinancing is one way to leverage your investment and do just that....

What Does It Mean to Refinance Your Home
What Does It Mean to Refinance Your Home

You can think of refinancing your mortgage as a debt redo. Essentially, you’ll swap out the existing loan for a new one - ideally with better terms and conditions. Only this time it could help you save money on high mortgage payments, rather than just borrow it....

Setting up the Utilities in My New House
Setting up the Utilities in My New House

All the tedious, time-consuming home closing documents have been signed, sealed, and delivered. Your belongings are packed into what seems like a million boxes and you have a solid plan to haul all your existing furniture to the new place. Just as your boxes and...

When Is My First Mortgage Payment Due?
When Is My First Mortgage Payment Due?

Navigating your way through a brand new mortgage loan can be a difficult task, especially for first time homeowners. After handing over a large sum of money for the down payment and closing costs, it’s important to pay attention to the timing of your first mortgage...

Newsletter

Don’t worry, we don’t spam

calculate your monthly mortgage payment

Related Topics

Helpful Links

Daily mortgage rate trends

Best mortgage lenders

First-time homebuyers programs by state

Loan limits by state

Types of mortgages

APR vs interest rate

Understanding PMI

Related Posts

THE TRUSTED PROVIDER OF ACCURATE RATES AND FINANCIAL INFORMATION