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Rates Jump

A run-up in mortgage rates this past week is likely relent during the next week, though no improvement is likely.

A 9-basis-point increase from last week was recorded for the average 30-year fixed-rate mortgage in Freddie Mac’s Primary Mortgage Market Survey for the week ended Thursday. At 4.60 percent, the 30-year mortgage was 3 BPS higher than during the same week last year.

No increase in mortgage rates should be expected in the next set of reports based on the 10-year Treasury note yield. In mid-morning trading, the 10-year yielded around 3.17 percent, not much different than 3.18 percent at the close of trading last Thursday, according to data reported by the Treasury Department and the Wall Street Journal.

Nearly half of panelists surveyed by Bankrate.com for the week July 7 to July 13 predicted that mortgage rates won’t move more than 2 BPS during the next week. A decline was forecasted by 35 percent, and 18 percent projected a rise.

Jumbo mortgages became a little more expensive last week relative it their conforming cousins, based on the U.S. Mortgage Market Index report for the week ended July 1 from Mortech Inc. and MortgageDaily.com. The jumbo-conforming spread rose to 47 BPS from 43 BPS a week prior.

Up more moderately than the 30-year mortgage, the 15-year rate climbed to 3.75 percent from 3.69 percent seven days prior, Freddie reported. The spread between 15-year and 30-year mortgages rose to 85 BPS from last week’s 82 BPS.

Freddie said that the five-year, Treasury-indexed, hybrid, adjustable-rate mortgage rose 8 BPS this week to 3.30 percent.

The one-year Treasury-indexed ARM increased to 3.01 percent in Freddie’s report from 2.97 percent a week earlier. But the one-year was lower than 3.75 percent a year earlier.

The index for the one-year ARM, the yield on the one-year Treasury note, closed at 0.19 percent Wednesday, the same as the prior Wednesday, the Treasury Department data indicated. A different ARM index, the six-month LIBOR, was unchanged as of Wednesday from the prior week at 0.40 percent, Bankrate.com reported.

ARM share fell to 9.79 percent in the latest Mortgage Market Index report from 10.05 percent the previous week.

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