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Mortgage Rates Likely to Continue Holding

Interest rates on single-family loans were mostly in a holding pattern over the past week, and the forecast is for more of the same.

On loans to finance a home purchase, 30-year fixed rates on conforming, conventional mortgages averaged 4.04 percent in April.

That turned out to be a big improvement compared to the previous month, when the average rate worked out to 4.24 percent.

The Federal Housing Finance Agency reported the rates based on a small survey of mortgage lenders.

At 3.94 percent in Freddie Mac’s Primary Mortgage Market Survey for the week ended June 1, thirty-year fixed rates were the lowest they’ve been since the week ended Nov. 17, 2016.

In last week’s survey, Freddie reported that 30-year fixed rates averaged 3.95 percent. As of the same week last year, long-term mortgage rates averaged 3.66 percent.

MBSQuoteline Director of Sales and Marketing Joe Farr said in a written statement that mortgage-backed securities prices have deteriorated slightly since Freddie conducted the survey, indicating mortgage rates are a little higher
than in the survey.

Mortgage Daily’s analysis of Treasury market activity indicates that fixed rates are not likely to be much different in Freddie’s next survey.

But a majority of panelists surveyed by Bankrate.com for the week May 31 to June 6 predicted that mortgage rates will decline at least 3 BPS during the next week. A third expected no change, and just 11 percent forecasted an increase.

In the U.S. Mortgage Market Index report from Mortgage Daily and OpenClose for the week ended May 26, interest rates on jumbo mortgages were 1 basis point less than conforming rates. The prior week, jumbo rates were 3 BPS higher than conforming rates.

Freddie reported average 15-year fixed rates at 3.19 percent, no different than in the week ended May 25. The spread between 15- and 30-year rates thinned to 75 BPS from 76 BPS in the preceding report.

At 3.11 percent in Freddie’s most-recent survey, five-year, Treasury-indexed, hybrid, adjustable-rate mortgages were 4 BPS higher than last week.

Rates on hybrid ARMs
adjust based on the one-year Treasury yield, which closed Thursday at 1.16 percent, according to the Treasury Department, the same as seven days earlier.

No change from one week prior was reported by Bankrate.com for the six-month London Interbank Offered Rate, which was 1.41 percent as of Wednesday.

Most recently in the Mortgage Market Index report, ARM share was 12.4 percent, widening significantly from 8.9 percent the previous week.

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