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Fixed Mortgage Rates Rise

Rates

Interest rates on fixed rate mortgages moved higher this past week, while short-term adjustable rates were idle.

In its Primary Mortgage Market Survey for the week ended Jan. 2, Freddie Mac reported that 30-year mortgages averaged 4.53 percent.

Interest rates moved up from a week earlier, when 30-year rates were 4.48 percent, and a year earlier, when the average was 3.34 percent.

“Mortgage rates edged up to begin the year on signs of a stronger economic recovery,” Freddie’s chief economist, Frank Nothaft, said in the weekly report. “The pending home sales index inched up 0.2 percent in November, after five consecutive months of decline. The Conference Board reported that confidence among consumers rose in December and the S&P/Case-Shiller 20-city composite house price index rose 13.6 percent over the 12-months ending in October 2013.”

Fixed rates are poised to stay close to current levels based on an analysis of Treasury Market Activity.

During the days that Freddie surveyed primary lenders this week, the yield on the 10-year Treasury note — a benchmark for fixed mortgage rates — averaged 3.02 percent, data from the Treasury Department indicate. On Thursday, the 10-year Treasury yield closed at 3.00 percent.

A majority of panelists surveyed by Bankrate.com for the week Jan. 2, through Jan. 8 agreed with Mortgage Daily’s forecast and predicted that rates won’t move more than 2 BPS during the next week. A quarter projected an increase, and 13 percent expected rates to move lower.

The U.S. Mortgage Market Index report from LoanSifter and Mortgage Daily for the week ended Dec. 27 indicated that jumbo mortgages were priced at a 21-basis-point premium over conforming rates. The premium diminished from 22 BPS a week earlier.

Fifteen-year mortgages averaged 3.55 percent in Freddie’s report this week, 3 basis points higher than in the week ended Dec. 26, 2013.

The difference between 15-year and 30-year rates was 98 BPS, widening from a spread of 96 BPS last week.

Freddie said five-year, Treasury-indexed, hybrid, adjustable-rate mortgages averaged 3.05 percent, 5 BPS higher than seven days ago.

One-year Treasury-indexed ARMs averaged 2.56 percent, the same as in the last report. One-year ARMs averaged 2.57 percent in the week ended Jan. 3, 2013.

The index for the one-year ARM, the yield on the one-year Treasury, was 0.13 percent Thursday, the same as seven days earlier.

At 0.35 percent on Tuesday, the six-month London Interbank Offered Rate was the same as it was in last week’s report.

ARM share soared to 16.7 percent in the latest Mortgage Market Index report from 11.2 percent in the report for the prior week.

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