Mortgage Daily Logo
mortgage news from industry experts

Rates Likely to Jump

Mortgage rates increased this past week, and market signals point to even higher rates next week.

The average 30-year fixed-rate mortgage was 4.92% in Freddie Mac’s Primary Mortgage Market Survey for the week ended Oct. 15, climbing from 4.87% a week earlier. The 30-year was 6.46% a year ago.

In an economic forecast issued earlier this week, Freddie pegged the average 30-year at 4.9% during the fourth quarter, compared to 5.2% in the third quarter.

The average 15-year fixed-rate mortgage rose 4 BPS from the previous week to 4.37%, Freddie said.

Mortgage rates are headed higher according to more than two-thirds of the 100 Bankrate.com panelists surveyed for the week Oct. 15 to Oct. 21. One-quarter projected that rates will not change more than 2 BPS during the next 35 to 45 days, and 8% expected lower rates ahead.

The yield on the 10-year Treasury bond was 3.443% during trading today, 28 BPS worse than 3.164% last week and an indication that mortgage rates are headed higher.

Up 3 BPS from a week earlier, the five-year Treasury-indexed hybrid adjustable-rate mortgage was 4.38% in Freddie’s survey.

The one-year Treasury-indexed ARM, meanwhile, was 4.60% in the latest week, 7 BPS worse than the prior week but 56 BPS better than 12 months earlier. The index for the one-year ARM, the yield on the one-year Treasury bill, was 0.35% yesterday, up 0.01% from seven days prior, according to data from the U.S. Department of the Treasury.

Freddie’s outlook indicated the one-year Treasury bill would yield 0.4% during the current quarter, lower than 0.5% in the third quarter.

A widely used index for subprime ARMs, the London Interbank Offered Rate, was 0.60% yesterday, unchanged from the previous week, Bankrate.com reported.

Applications for ARMs accounted for 6.2% of activity in Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ended Oct. 9, nudging up from 6.1% the prior week.

Third- and fourth-quarter ARM share was estimated at 4% in Freddie’s outlook.

MBA’s report indicated that overall applications eased 2% on a week-to-week basis. The decline was the result of a 5% drop in purchase activity. Refinances, meanwhile, were nearly unchanged — though refinance share crept up to 67% from 66% a week earlier.

Freddie expects refinance share to ease to 55% from the third quarter’s 57%.

Popular posts

How Long Does It Take to Refinance a Mortgage
How Long Does It Take to Refinance a Mortgage

So, you’re interested in refinancing your mortgage. Maybe you want some extra capital to do that home project you’ve always dreamed of, interest rates are nearing record lows, or you want to start consolidating debt. Regardless of the motivation behind the refinance,...

How Does Refinancing a Mortgage Work
How Does Refinancing a Mortgage Work

A home purchase is considered an investment, and a robust one at that. Savvy owners are constantly looking for new ways to reduce debt, save money, pay less in interest, and ultimately build equity. Refinancing is one way to leverage your investment and do just that....

What Does It Mean to Refinance Your Home
What Does It Mean to Refinance Your Home

You can think of refinancing your mortgage as a debt redo. Essentially, you’ll swap out the existing loan for a new one - ideally with better terms and conditions. Only this time it could help you save money on high mortgage payments, rather than just borrow it....

Setting up the Utilities in My New House
Setting up the Utilities in My New House

All the tedious, time-consuming home closing documents have been signed, sealed, and delivered. Your belongings are packed into what seems like a million boxes and you have a solid plan to haul all your existing furniture to the new place. Just as your boxes and...

When Is My First Mortgage Payment Due?
When Is My First Mortgage Payment Due?

Navigating your way through a brand new mortgage loan can be a difficult task, especially for first time homeowners. After handing over a large sum of money for the down payment and closing costs, it’s important to pay attention to the timing of your first mortgage...

Newsletter

Don’t worry, we don’t spam

calculate your monthly mortgage payment

Related Topics

Helpful Links

Daily mortgage rate trends

Best mortgage lenders

First-time homebuyers programs by state

Loan limits by state

Types of mortgages

APR vs interest rate

Understanding PMI

Related Posts

THE TRUSTED PROVIDER OF ACCURATE RATES AND FINANCIAL INFORMATION