Interest rates on residential loans turned higher this past week. But current market conditions suggest mortgage rates could be lower in the next report.
In Freddie Mac’s Primary Mortgage Market Survey for the week ended July 16, thirty-year fixed rates averaged 4.09 percent.
The 30 year climbed five basis points from the previous week but has declined by four basis compared to a year earlier.
Freddie Mac Chief Economist Sean Becketti attributed the rise from the last report to volatility emanating out of Greece.
“The crisis in Greece continues to generate volatility in U.S. Treasury yields,” Becketti said in the report. “The tentative agreement hammered out last weekend gave investors the confidence to pull back a bit from Treasuries.”
Joe Farr, director at MBSQuoteline, said rates have eased since Freddie conducted its survey.
“MBS prices have improved  since the Freddie survey was conducted, so the rate Freddie shows as of the 16th is a little higher than it would be if the survey had been taken on the 16th,” Farr explained in a written statement.
In its Origination Insight report for June, Ellie Mae Inc. reported that 30-year fixed rates averaged 4.118 percent in June, rising from 4.013 one month earlier.
On conventional mortgages, the 30 year averaged 4.218 percent in June according to Ellie, while it was just 4.047 percent on loans insured by the Federal Housing Administration and only 3.871 percent on mortgages guaranteed by the Department of Veterans Affairs.
Mortgage Daily’s analysis of Treasury market activity indicates that fixed rates could be around four BPS lower in Freddie’s next report.
Half of the panelists surveyed by Bankrate.com for the week July 16 to July 22 predicted mortgage rates won’t move more than two BPS over the next week or so. Another 36 percent forecasted an increase, and just 14 percent projected a decline.
Interest rates on jumbo mortgages were 17 BPS less than conforming rates in the U.S. Mortgage Market Index report from OpenClose and Mortgage Daily for the week ended July 10. The jumbo-conforming spread widened from a negative 13 BPS the previous week.
Fifteen-year mortgages experienced a five-basis-point week-over-week increase to 3.25 percent, Freddie said. The spread between 15- and 30-year rates was 84 BPS, the same as in the last survey.
Ellie’s report indicated that 15-year loans accounted for 9.7 percent of originations in June, off from 9.8 percent in May.
Freddie reported
that five-year, Treasury-indexed, hybrid, adjustable-rate mortgages averaged 2.96 percent, three BPS more than in the week ended July 9.
One-year Treasury-indexed ARMs averaged 2.50 percent in Freddie’s survey, the same as seven days prior. One-year ARMs, however, have risen 11 BPS from the week ended July 17, 2014.
The one-year Treasury yield, which determines rate and payment changes on one-year ARMs, rose to 0.29 percent Thursday from 0.25 percent a week prior, according to Treasury Department data.
A less-utilized ARM index, the six-month London Interbank Offered Rate — or LIBOR — climbed to 0.46 percent Wednesday from
0.44 percent one week prior, Bankrate.com reported.
ARMs accounted for 4.9 percent of June’s mortgage production, Ellie said. ARM share widened from 4.7 percent the previous month.
ARM share was 9.6 percent in the latest Mortgage Market Index report, narrowing from 11.3 percent the prior week.
