Mortgage rates inched higher on a strong employment report but could give back all of the increase in the next rate report.
A 3-basis-point increase from seven days earlier left 30-year fixed rates averaging 4.15 percent in Freddie Mac’s Primary Mortgage Market Survey for the week ended Thursday.
In assessing this week’s movement, Freddie Mac Chief Economist Frank Nothaft highlighted last week’ strong employment report.
But long-term fixed rates have improved compared to the same week last year, when 30-year rates averaged 4.51 percent.
The Federal Open Market Committee’s statement that it could wind down its bond buying campaign after its October meeting had little impact on Treasury yields Wednesday.
This week’s Treasury market activity points to slightly lower fixed rates in Freddie’s next survey. In the days that Freddie surveyed lenders this week, the 10-year Treasury yield averaged 2.59 percent, while it closed Thursday at 2.55 percent based on Treasury Department data.
But that projection was not shared by any of the panelists surveyed by Bankrate.com for the week July 10 to July 16. Eighty percent predicted that rates won’t move more than 2 BPS over the next week, while 20 percent expected an increase.
In the U.S. Mortgage Market Index report from LoanSifter/Optimal Blue and Mortgage Daily for the week ended July 4, jumbo mortgage rates were 8 BPS less than conforming rates. In the previous report, the jumbo-conforming spread was a negative 11 BPS.
Fifteen-year fixed rates landed at 3.24 percent in Freddie’s survey, just 2 BPS more than in the week ended July 3. Borrower’s on 15-year mortgages had rates that were 91 BPS better than 30-year borrowers. The spread widened from 90 BPS in the previous report.
A one-basis-point rise from Freddie’s last survey left five-year, Treasury-indexed, hybrid, adjustable-rate mortgages averaging 2.99 percent.
Freddie said one-year Treasury-indexed ARMs averaged 2.40 percent, 2 BPS higher than a week earlier but 26 BPS better than a year earlier.
The yield on the one-year Treasury note, which determines rate and payment adjustments on the one-year ARM, slipped to 0.10 percent today from 0.11 percent last Thursday, according to the Department of the Treasury.
No change from seven days earlier was reported by Bankrate.com for the six-month London Interbank Offered Rate, which was 0.33 percent as of Wednesday.
ARM share in the most recent Mortgage Market Index report narrowed to 10.6 percent from the previous week’s 10.8 percent.
