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Fixed Interest Rates on Home Loans Jump

Interest rates on residential loans turned higher this past week. The escalation came despite severe deterioration in monthly employment statistics.

Freddie Mac reported in its Primary Mortgage Market Survey for the week ended Oct. 12 that fixed interest rates on 30-year mortgages averaged 3.91 percent.

Long-term mortgage rates
jumped 6 basis points from the preceding seven-day period. The year-over-year increase was more severe at 44 BPS.

The ascension came as
a sharp reversal reported in monthly job growth by the Bureau of Labor Statistics was apparently anticipated in light of the recent hurricanes.

An alert from MBSQuoteline’s Joe Farr indicates prices on mortgage-backed securities have moved higher since Freddie conducted its survey, suggesting that mortgage rates have moved lower.

A Mortgage Daily analysis of Treasury market activity suggests mortgage rates likely won’t be much different in Freddie’s next survey, possibly a couple BPS lower.

Sixty-two percent of panelists surveyed by Bankrate.com for the week Oct. 11 to Oct. 18 predicted rates won’t move more than 2 BPS over the next week. A decline was projected by 23 percent, and just 15 percent expected an increase.

Interest rates on jumbo mortgages were 12 BPS higher than conforming rates in the U.S. Mortgage Market Index report from Mortgage Daily and OpenClose for the week ended Oct. 6. Jumbo rates were 14 BPS higher than conforming rates in the prior week.

Fifteen-year fixed rates averaged 3.21 percent in today’s report from Freddie. Like the 30 year, the 15 year moved up 6 BPS compared to the previous survey. That left the spread between 15- and 30-year rates at 70 BPS.

A 2-basis-point decline left five-year, Treasury-indexed, hybrid adjustable-rate mortgages averaging 3.16 percent in Freddie Mac’s latest report.

Hybrid borrowers will be facing upward pressure on their rates based on the one-year Treasury note yield, which was reported by the Department of the Treasury at 1.41 percent, 6 BPS worse than
the preceding Thursday.

At 1.52 percent, the six-month London Interbank Offered Rate as of Wednesday was the same as seven days sooner, according to Bankrate.com.

The latest Mortgage Market Index report had ARM share at 9.7 percent, thinning considerably from 16.1 percent in the preceding report.

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