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Mortgage Rates Inch Up and Could Creep Higher

There was little change in mortgage rates this past week, though rates did move up modestly and could do so again in the next report.

Thirty-year fixed rates inched up 2 basis points from last week to 4.12 percent in Freddie Mac’s Primary Mortgage Market Survey for the week ended Sept. 11.

Thirty-year mortgage rates, however, have descended from the same week last year, when the average was 4.57 percent.

Mortgage rates might be around 3 BPS worse in Freddie’s next survey based on Mortgage Daily’s analysis of Treasury market activity.

Mortgage rates tend to track the yield on the 10-year Treasury note, which averaged 2.51 percent during the period covered in Freddie’s survey, based on Treasury Department data. The 10-year yield closed Thursday at 2.54 percent.

But a majority of panelists surveyed by for the week Sept. 11 to Sept. 17 predicted that mortgage rates won’t change over the next week or so. An increase of at least 3 BPS was forecasted by 29 percent, and a decline was projected by just 14 percent.

The spread between jumbo rates and conforming rates was a negative 13 BPS in the U.S. Mortgage Market Index report from LoanSifter/Optimal Blue and Mortgage Daily for the week ended Sept. 5. The jumbo-conforming spread widened from the prior week, when jumbo rates were 5 BPS better than conforming rates.

Average 15-year fixed rates were 3.26 percent in Freddie report, 2 BPS more than in the week ended Sept. 4. The spread between 15- and 30-year rates was unchanged from the previous report at 86 BPS.

Freddie reported that five-year, Treasury-indexed, hybrid, adjustable-rate mortgages averaged 2.99 percent, also 2 BPS worse than seven days earlier.

A 5-basis-point leap from the prior report left one-year Treasury-indexed ARMs averaging 2.45 percent in Freddie’s survey. One-year ARMs averaged 2.67 percent in the week ended Sept. 12, 2013.

The yield on the one-year Treasury note, which is used to determine rate and payment changes on one-year ARMs, rose to 0.11 percent Thursday from 0.10 percent a week earlier, according to the Treasury Department.

Another, less popular, ARM index, the six-month London Interbank Offered Rate — or LIBOR — was 0.33 percent, unchanged since June.

In the latest Mortgage Market Index report, ARM share was 11.4 percent, narrowing from 11.5 percent the previous week.

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