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Mixed Bag for Mortgage Rates

Mortgage rates were mixed this past week, with long-term fixed rates and short-term adjustable rate mortgages moving higher, short-term fixed rates holding firm and hybrid ARMs moving lower.

A 5-basis-point rise from last week left 30-year fixed rates averaging 4.28 percent in Freddie Mac’s Primary Mortgage Market Survey for the week ended Feb. 13.

The increase in 30-year rates was more apparent compared to the same week in 2013, when the average was 75 BPS better.

Thirty-year rates are likely to be near their current level in Freddie’s report based on Mortgage Daily’s analysis of Treasury market activity.

A benchmark for fixed mortgage rates, the yield on the 10-year Treasury note, averaged 2.75 percent during the period that Freddie conducted its survey this week, according to Treasury Department data.

The 10-year yield closed Thursday at 2.73 percent. The minimal 2-basis-point decline from the average puts rates on track to be around the same level the next time around.

A majority of panelists surveyed by for the week Feb. 13, to Feb. 19 predicted that mortgage rates will rise at least 3 BPS during the next week or so. A quarter forecasted that no change is ahead, and 12 percent projected a decline.

In the U.S. Mortgage Market Index report from LoanSifter and Mortgage Daily for the week ended Feb. 7, jumbo mortgages were priced at a 12-basis-point premium over their conforming counterparts. The jumbo-conforming spread edged up from 10 BPS in the prior report.

Freddie reported average 15-year fixed rates at 3.33 percent, the same as in the week ended Feb. 6. The resulting spread between 15- and 30-year mortgages improved to 95 BPS from 90 BPS in the last report.

Five-year, Treasury-indexed, hybrid ARMs averaged 3.05 percent in Freddie’s most recent survey, 3 BPS lower than seven days earlier.

At 2.55 percent, one-year Treasury-indexed ARMs were up 4 BPS from the previous report. One-year ARMs averaged 2.61 percent in the week ended Feb. 14, 2012.

Changes to the rate and payments on the one-year ARM are determined by changes in the one-year Treasury yield, which slipped to 0.12 percent today from 0.13 percent last Thursday, according to Treasury Department data.

Another ARM index, the six-month London Interbank Offered Rate, was 0.33 percent Wednesday, the same as a week earlier, reported.

ARM share was 12.7 percent in the most recent Mortgage Market Index report, about the same as in the prior report.

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