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Rates Fall After Weak Employment Report, Might Hold

A disappointing jobs report pulled down interest rates on home loans this past week. Over the upcoming week, rates are unlikely to move much.

The Primary Mortgage Market Survey for the week ended June 8 from Freddie Mac had 30-year fixed rates averaging 3.89 percent.

That was the lowest average for long-term rates on residential loans since the week ended Nov. 10, 2016, when the 30 year was reported at 3.57 percent.

The retreat in rates came following the May employment report, which indicated that nonfarm payroll grew by a meager 138,000 jobs in May.

“Mixed economic data and increasing uncertainty are continuing to push rates to the lowest levels in nearly seven months,” Freddie Mac Chief Economist Sean Becketti said in the report.

Freddie previously reported that 30-year rates averaged 3.94 percent in last week’s report and 3.60 percent in the same week last year.

Prices on mortgage-backed securities have dipped since Freddie surveyed retail lenders, indicating mortgage rates were slightly higher as of today, Joe Farr, director of sales and marketing at MBSQuoteline, said in a written statement to Mortgage Daily.

A Mortgage Daily analysis of activity in the U.S. Treasury market has fixed rates holding near their current levels, perhaps rising a couple BPS, when Freddie conducts its next survey.

Eighty-nine percent of panelists surveyed for the week June 7 to June 13 by Bankrate.com were evenly divided over whether rates would hold or decline. Just 11 percent predicted an increase of at least 3 BPS.

Interest rates on jumbo mortgages were less than a basis point under conforming rates in the U.S. Mortgage Market Index report from Mortgage Daily and OpenClose for the week ended June 2.

The PMMS had 15-year fixed rates averaging 3.16 percent, improving 3 BPS from the week ended June 1, 2017. The difference between 15- and 30-year rates was 73 BPS, thinner than the 75-basis-point spread in the last report.

Freddie reported that five-year, Treasury-indexed, hybrid, adjustable-rate mortgages averaged 3.11 percent, no different than last week.

Treasury Department data indicate that the yield on the one-year Treasury note was 1.19 percent Thursday, rising from 1.16 percent seven days sooner.

Bankrate.com reported that the six-month London Interbank Offered Rate was 1.42 percent as of Wednesday, a basis point more than one week prior.

The most-recent Mortgage Market Index report indicated that ARM share was 9.3 percent, thinning from 12.4 percent the previous week.

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