Mortgage Daily

Published On: January 4, 2018

Several macroeconomic factors have impacted, and will continue to impact, mortgage rates. Most recently, rates turned lower ahead of the jobs report.

Fixed interest rates on 30-year single-family loans averaged 3.95 percent in the week ended Jan. 4, according to Freddie Mac’s Primary Mortgage Market Survey.

Long-term mortgage rates retreated from 3.99 percent in the preceding seven-day period and 4.20 percent in the same seven days last year.

“With the FOMC minutes showing continued support for gradual increases in policy rates from many participants and inflation rates remaining low, there isn’t much upward pressure on long-term rates at the moment,” Freddie Mac Deputy Chief Economist Len Kiefer said in the report. “Whether that changes due to a tighter labor market and the economic impact of tax reform remains to be seen.” panelists surveyed for the week Jan. 3 to Jan. 9 were evenly split over whether mortgage rates will increase over the next week or remain within 2 BPS of their current level.

Tomorrow’s employment report will likely have an impact on rates — with an increase likely if jobs added during December significantly exceeded 200,000 and a decrease possible if fewer than 150,000 jobs were added.

In the U.S. Mortgage Market Index report from Mortgage Daily and OpenClose for the week ended Dec. 29, jumbo interest rates were 22 BPS higher than conforming rates, off from 25 BPS the preceding week.

On 15-year mortgages, Freddie reported that fixed rates averaged 3.38 percent, tumbling from 3.44 percent in the week ended Dec. 28, 2017. The spread between 15- and 30-year rates widened to
57 BPS from 55 BPS.

Freddie reported that five-year, Treasury-indexed, hybrid adjustable-rate mortgages averaged 3.45 percent, 2 BPS less than the previous week.

Hybrid ARM rates change based on the one-year Treasury note yield, which the Treasury Department reported at 1.82 percent as of Thursday,
climbing from 1.76 percent seven days earlier. reported the six-month London Interbank Offered Rate at 1.84 percent as of Wednesday, inching up from 1.83 percent the prior Wednesday.

Another ARM index, the 11th District Cost of Funds Index, was reported by the Federal Home Loan Bank of San Francisco at 0.746 percent for November, rising from 0.737 percent in October.

ARM share was 15.3 percent in the latest Mortgage Market Index report, widening from 11.5 percent the previous week.

On home-equity lines of credit, Chief Financial Analyst Greg McBride predicts rates will climb around 75 BPS to 5.85 percent by the end of next year thanks to three more Fed rate hikes.

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