Thirty-year mortgage rates moved lower this past week and this past month. Short- and long-term forecasts have little movement ahead for mortgage rates.
Ellie Mae Inc.’s Origination Insight Report | September 2018 indicated that average 30-year note rates on single-family loans closed last month were 4.91 percent.
Average rates were 4.93 percent on conventional mortgages, 4.95 percent on loans insured by the Federal Housing Administration, and lowest at 4.73 percent on mortgages guaranteed by the Department of Veterans Affairs.
During just the seven days ended Oct. 18, thirty-year fixed rates in Freddie Mac’s Primary Mortgage Market Survey averaged 4.85 percent, retreating 5 BPS from a week earlier. But 30-year rates have soared 97 BPS from a year earlier.
With current long-term rates within 5 BPS of seven-year highs, banks are seeing lower origination volumes — “keeping their once sizable mortgage banking revenues at depressed levels,” Moody’s Investors Service said in a sector commentary.
The New York-based ratings agency warned that higher rates could also lead to repayment problems for some borrowers.
Not much change in 30-year fixed rates is likely in Freddie’s next survey based on an analysis of Treasury market data by Mortgage Daily.
Sixty-four percent of panelists surveyed by Bankrate.com for the week Oct. 17 to Oct. 22 agreed with Mortgage Daily’s forecast and predicted no change. The remaining 36 percent were evenly split over whether rates would rise at least 3 BPS or fall.
In the Mortgage Bankers Association’s MBA Mortgage Finance Forecast, the trade group predicted that 30-year fixed rates will go from 4.9 percent this quarter to 5.0 percent in the first-quarter 2019 then stagnate at 5.1 percent each of the following six quarters.
Jumbo interest rates were 3 BPS less than conforming rates in the
U.S. Mortgage Market Index report from Mortgage Daily and OpenClose for the week ended Oct. 12, a wild swing from a week previous, when jumbo rates were 20 BPS higher.
Average 15-year fixed rates dipped 3 BPS to 4.26 percent, Freddie’s survey indicated. Fifteen-year rates were 59 BPS better than 30-year rates. The spread was down from 61 BPS in last week’s report.
Freddie reported that five-year, Treasury-indexed, hybrid adjustable-rate mortgages averaged 4.10 percent, climbing 3 BPS from the week ended Oct. 11.
The yield on the one-year Treasury note, which determines rate changes on hybrid ARMs, closed Thursday at 2.47 percent, rising 3 BPS from the previous Thursday, according to Treasury Department data.
An index for a few legacy ARMs, the six-month London Interbank Offered Rate, closed Wednesday at 2.66138 percent, climbing from 2.63625 percent seven days earlier, the Wall Street Journal reported.
LIBOR will eventually be replaced by the Secured Overnight Financing Rates, which the Federal Reserve Bank of New York reported at 2.18 percent as of yesterday, rising from 2.15 percent the preceding Wednesday.
ARM share most recently in the Mortgage Market Index report was 19.3 percent, widening form 17.8 percent in the previous seven-day period.
Ellie’s report had ARM share at 7.2 percent in September, widening from 6.6 percent the preceding month and 5.5 percent a year previous. ARM share was 7.3 percent on conventional transactions, 0.6 percent on FHA closings and only 0.4 percent on VA mortgages.