Mortgage rates didn’t rise this past week, with 15-year and adjustable rates actually losing altitude. The benefit of taking a shorter-term loan increased this week, while jumbo pricing improved compared to its conforming counterpart.
At 3.53 percent, the average 30-year fixed-rate mortgage in Freddie Mac’s Primary Mortgage Market Survey for the week ended Feb. 7 was the same as it was a week earlier. The 30 year was down, however, from a year earlier, when it averaged 3.87 percent.
Mortgage rates didn’t rise following a “mostly positive” employment report, according to Freddie Mac Chief Economist Frank Nothaft. But the employment report did reflect an increase in the unemployment rate, to 7.9 percent from 7.8 percent in December.
Mortgage Daily’s weekly analysis of Treasury market activity indicates that mortgage rates likely won’t be much different in Freddie’s next survey. According to data reported by the Department of the Treasury, the yield on the benchmark 10-year Treasury note averaged 2.01 percent during the days Freddie surveyed its lenders, while the yield closed at 1.99 percent Thursday.
A majority of panelists surveyed by Bankrate.com for the week Feb. 7 to Feb. 13 agreed with the Mortgage Daily forecast and predicted mortgage rates won’t move more than 2 BPS over the next week or so. Nearly a third predicted an uptick, and just 15 percent forecasted a decline.
Jumbo borrowers locked in at rates that were 25 BPS above conforming rates, according to the U.S. Mortgage Market Index report from Optimal Blue and Mortgage Daily for the week ended Feb. 1. The jumbo-conforming spread was trimmed from 26 BPS in the previous report.
A 4-basis-point decline from the week ended Jan. 31 was reported by Freddie for the 15-year fixed-rate mortgage, which averaged 2.77 percent this week. The spread between 15- and 30-year loans improved to 76 BPS from 72 BPS one week prior.
Freddie said five-year, Treasury-indexed, hybrid, adjustable-rate mortgages averaged 2.63 percent, 7 BPS better than last week.
The one-year Treasury-indexed ARM averaged 2.53 percent in Freddie’s report, better than 2.59 percent in the prior report and 2.78 percent in the week ended Feb. 9, 2012.
There has been no change during the past seven trading days in the yield on the one-year Treasury note, which the Treasury Department reported at 0.15 percent as of Thursday.
Like the one-year Treasury yield, the yield on the six-month London Interbank Offered Rate is used as an index to determine rate changes on ARMS — though LIBOR is less widely used. LIBOR slipped to 0.47 percent as of Wednesday from 0.48 percent seven days earlier, according to Bankrate.com.
ARM share rose to 4.8 percent in the latest Mortgage Market Index report from the prior week’s 3.2 percent.