Mortgage Daily Logo
mortgage news from industry experts

Mortgage Rates Down, Could Go Lower

Fixed interest rates on residential loans retreated this week, and all indications are that they could fall further.

At 4.32 percent, 30-year fixed rates averaged 7 basis points less than they did last week, according to Freddie Mac’s Primary Mortgage Market Survey for the week ended Thursday.

But despite that 30-year rates have moved lower every week since the week ended Jan. 2, when they averaged 4.53 percent, the average stands well above the 3.53 percent as of a year earlier.

Rates moved lower following weak housing reports, according to Freddie Mac Chief Economist Frank Nothaft.

“Mortgage rates eased somewhat as new home sales fell 7 percent in December to a seasonally adjusted pace of 414,000 units, below the consensus,” Nothaft said in the report. “The S&P/Case-Shiller 20-city composite house price index declined 0.1 percent for the month of November, the first decrease since November 2012.”

Freddie’s regulator and conservator, the Federal Housing Finance Agency, reported that 30-year fixed rates increased to an average of 4.54 percent in December from 4.48 percent the previous month.

The Federal Open Market Committee disclosed that it decided at its December meeting to reduce its monthly purchases of agency mortgage-backed securities to $30 billion from $35 billion. Investments in Treasury securities will be cut to $35 billion a month from $40 billion a month.

Fixed rates could drop by around 3 BPS in Freddie’s next report from their current levels based on Mortgage Daily’s analysis of Treasury market activity.

According to data reported by the Department of the Treasury, the yield on the 10-year Treasury note — which is tracked by fixed mortgage rates — averaged 2.75 percent during the period that Freddie conducted this week’s survey, while it closed at 2.72 percent today.

A plurality of panelists — 42 percent — surveyed by Bankrate.com for the week Jan. 30 to Feb. 5 predicted that mortgage rates will move at least 3 BPS lower over the next week. The remaining panelists were evenly split about whether rates would rise or stay where they are now.

Interest rates on jumbo mortgages were just under 13 BPS higher than on conforming loans in the U.S. Mortgage Market Index report from LoanSifter and Mortgage Daily for the week ended Jan. 24. The jumbo-conforming spread slipped from just over 13 BPS a week earlier.

Freddie reported that 15-year fixed rates averaged 3.40 percent, 4 BPS better than the week ended Jan. 23. Fifteen-year mortgages were less attractive this week, with the discount from 30-year rates falling to 92 BPS from 95 BPS in the last report.

At 3.12 percent, five-year, Treasury-indexed, adjustable-rate mortgages averaged 3 BPS lower than a week earlier.

One-year Treasury-indexed ARMs averaged 2.55 percent in the latest survey, rising from 2.54 percent in Freddie’s previous report and 2.59 percent in the week ended Jan. 31, 2013.

The one-year Treasury note, which is the index for the one-year ARM, dropped to 0.10 percent Thursday from 0.11 percent seven days earlier based on Treasury Department data.

No change from a week earlier was reported for the six-month London Interbank Offered Rate, which Bankrate.com said was 0.33 percent Wednesday.

ARM share in the most recent Mortgage Market Index report climbed to 12.5 percent from 11.8 percent in the previous report.

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