For the second week in a row, interest rates on residential loans have moved higher. And for the second week in a row, they could rise further.
For the week that ended on March 10, thirty-year fixed rates averaged 3.68 percent in Freddie Mac’s Primary Mortgage Market Survey.
That was four basis points worse than in the previous weekly report thanks mostly to a strong U.S. employment report for the month of February.
But long-term rates have improved from 3.86 percent during the same week in 2015.
Since the time Freddie’s survey was conducted, interest rates have risen further, according to MBSQuoteline Director Joe Farr.
A Mortgage Daily analysis of Treasury market activity suggests that fixed rates on home loans are likely to be around five BPS worse in the next survey from Freddie.
Nearly two-thirds of panelists surveyed by Bankrate.com for the week March 10 to March 16 agreed with Mortgage Daily’s forecast and predicted mortgage rates will increase by at least three BPS over the next week. Just over a fifth expected no changes, and 14 percent projected a decline.
But Bankrate.com Chief Financial Analyst Greg McBride sees little movement ahead for mortgage rates.
“With the Federal Reserve expected to keep interest rates on hold, don’t expect much movement in mortgage rates in the days leading up to the Fed meeting,” McBride said in a written statement Thursday.
Interest rates on jumbo mortgages were eight BPS lower than conforming rates in the U.S. Mortgage Market Index report from OpenClose and Mortgage Daily for the week ended March 4. The jumbo-conforming spread widened from from a negative seven BPS a week earlier.
Freddie’s survey had 15-year fixed rates averaging 2.96 percent, just two BPS more than seven days earlier. The spread between 15- and 30-year rates widened to 72 BPS from 70 BPS one week earlier.
At 2.92 percent in Freddie’s latest report, five-year, Treasury-indexed, hybrid, adjustable-rate mortgages were eight BPS worse than a week previous.
One-year ARM rates were 2.81 percent as of March 10, according to HSH.com. The one year averaged 2.58 percent seven days prior.
Freddie previously reported the one-year ARM at 2.46 percent for the week ended March 12, 2015.
The index for the one-year ARM, the yield on the one-year Treasury, closed Thursday at 0.69 percent, rising again from the prior week, when the yield was 0.65 percent.
At 0.90 percent as of March 9, the six-month London Interbank Offered Rate — or LIBOR — was two BPS more than in last week’s report.
ARM share fell to 6.7 percent in the latest Mortgage Market Index report from 9.9 percent a week earlier.
