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Rates Hunker Down Amid Mixed Signals

Rates

Fixed mortgage rates dug in their heels as employment data were mixed, and signs point to further stabilization over the next week. But adjustable rates improved.

No change from last week left 30-year fixed-rate mortgages averaging 4.57 percent in Freddie Mac’s Primary Mortgage Market Survey for the week ended Sept. 12. But the 30 year has changed from a year earlier, when it averaged just 3.55 percent.

Thirty-year mortgage rates are likely to see another week with little movement based on Mortgage Daily’s analysis of this week’s Treasury market activity.

Treasury Department data indicate that 10-year Treasury yields averaged 2.93 percent during the days that Freddie conducted this week’s survey, while the 10-year yield closed at 2.92 percent on Thursday.

Forty-five percent of panelists surveyed by Bankrate.com for the week Sept. 12 to Sept. 18 agreed with Mortgage Daily and predicted rates won’t move more than 2 BPS over the next seven days or so. A third forecasted an increase, and 22 percent saw rates moving lower.

Also unchanged from the previous report was the jumbo-conforming spread, which stayed at 26 BPS in the U.S. Mortgage Market Index report from LoanSifter and Mortgage Daily for the week ended Sept. 6.

Fifteen-year mortgages averaged 3.59 percent in Freddie’s report. Like 30-year loans, 15-year rates were unchanged from the week ended Sept. 5. The spread between 15- and 30-year mortgages was also unmoved at 98 BPS.

“Mortgage rates were little changed this week following a mixed employment report,” Freddie Mac Chief Economist Frank Nothaft explained in the survey. “For example, the economy added 169,000 jobs in August, which was below the market consensus forecast, and revisions subtracted another 74,000 from the prior two months. Meanwhile, the unemployment rate fell to 7.3 percent which was the lowest since December 2008.”

Freddie reported that five-year, Treasury-indexed, adjustable-rate mortgages averaged 3.22 percent, 6 BPS better than a week earlier.

One-year Treasury-indexed ARMs averaged 2.67 percent, lower than 2.71 percent in the prior report but higher than 2.61 percent in Freddie’s report for the week ended Sept. 13, 2012.

The one-year Treasury yield, which serves as the index for one-year ARMs, tumbled to 0.13 percent Thursday from 0.16 percent a week earlier, according to the Treasury Department’s data.

But there was no change from a week earlier in the six-month London Interbank Offered Rate, which Bankrate.com reported at 0.39 percent as of Wednesday.

The most-recent Mortgage Market Index report said that ARM share increased to 10.1 percent from the prior weeks 9.9 percent.

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