Mortgage Daily Logo

Mortgage Rates Set to Rise


Fixed mortgage rates slipped this week and stand barely above the record lows reached less than two months ago. But interest rates are likely to be 10 basis points higher by the time the next report comes out.

At an average of 3.34 percent in Freddie Mac’s Primary Mortgage Market Survey for the week ended Jan. 3, the 30-year fixed-rate mortgage was within 3 basis points of its all-time low reached the week ended Nov. 21.

A week earlier, the 30 year averaged 3.35 percent, while the average was 3.91 percent a year earlier.

Mortgage rates are poised to jump in Freddie’s next report based on a Mortgage Daily analysis of Treasury market activity.

During the days that Freddie surveyed lenders for this week’s report, the yield on the 10-year Treasury averaged 1.82 percent, according to data reported by the Department of the Treasury. But, thanks mostly to a ‘fiscal cliff’ deal that sent stock prices soaring, the 10-year yield jumped to 1.92 percent as of today’s close.

But weak employment numbers — such as an increase of less than 125,000 in nonfarm payrolls or an unemployment rate above 8 percent — in tomorrow’s report from the Department of Labor could place downward pressure on mortgage rates.

A majority of panelists surveyed by for the week Jan. 3 through Jan. 9 agreed that mortgage rates will increase. But more than a quarter predicted a decline, and nearly a fifth don’t see mortgage rates moving more than 2 BPS over the next week or so.

Jumbo mortgages were priced at a 31-basis-point premium over conforming loans in the U.S. Mortgage Market Index from Optimal Blue and Mortgage Daily for the week ended Dec. 28. The jumbo-conforming spread narrowed from 34 BPS in the prior report.

Freddie reported the average 15-year fixed-rate mortgage at 2.64 percent, 1 basis point less than the week ended Dec. 27, 2012. Borrowers who opted for a 15-year mortgage had an average rate that was 70 BPS better than on 30-year loans, the same spread as last week.

Five-year, Treasury-indexed, hybrid, adjustable-rate mortgages moved up a basis point from a week earlier to average 2.71 percent in Freddie’s survey.

It was the same story for the Treasury-indexed, one-year ARM, which averaged 2.57 percent this week and 2.56 percent last week. The one year averaged 2.80 percent in the week ended Jan. 5, 2012.

The yield on the one-year Treasury note, which determines rate and payment adjustments on one-year ARMs, closed at 0.15 percent Thursday, according to the Treasury Department. The 10-year yield was unchanged from a week prior.

The six-month London Interbank Offered Rate, which is also utilized as an ARM index, was 0.51 percent as of Wednesday, according to LIBOR was unchanged from seven days earlier.

Just 2.5 percent of all rate locks reflected in the latest Mortgage Market Index report from were for ARMs. A week prior, ARM share was 3.5 percent.

Related Posts

Mortgage Rates Up 92 BPS From Year Ago

Mortgage Rates Up 92 BPS From Year Ago

Over the past year, weekly fixed interest rates on single-family loans have soared 92 basis points. But little change was reported from last week, and more of the same is expected. On conventional loans utilized to finance a home purchase with amounts up to the...

Mortgage Rates Up 92 BPS From Year Ago

Mortgage Rate Forecasts Have Little Change Ahead

Thirty-year mortgage rates moved lower this past week and this past month. Short- and long-term forecasts have little movement ahead for mortgage rates. Ellie Mae Inc.'s Origination Insight Report | September 2018 indicated that average 30-year note rates on...

Mortgage Rates Up 92 BPS From Year Ago

Mortgage Rates Soar, Could Sink in Next Report

An expected surge in mortgage rates came to fruition this week. The latest forecast has fixed rates tumbling in next week's report. A new index for adjustable-rate mortgages moved lower. A stunning 19-basis-point surge from the preceding week left average 30-year...

Mortgage Rates Up 92 BPS From Year Ago

Mortgage Rates Dip, But Likely to Skyrocket

Mortgage rates retreated a modest amount just one week after climbing to a seven-year high. The next rate report, however, is likely to reflect significant escalation. Prospective 30-year borrowers using the LendingTree network during September were offered an average...

Mortgage Rates Up 92 BPS From Year Ago

Mortgage Rates Little Changed, More of Same Ahead

Over the past week, there was little change in interest rates on home loans. During the next week, more of the same is likely. Recently rising rates have helped the Federal Home Loan Banks' earnings. Conventional mortgages with conforming loan amounts used to finance...

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...


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