Driven by relatively strong home price data, fixed mortgage rates moved higher this week. Adjustable rates, however, were slightly lower.
In its Primary Mortgage Market Survey for the week ended Nov. 27, Freddie Mac said that 30-year fixed rates averaged 4.29 percent.
“Fixed mortgage rates retraced some of their decline of the prior week as housing data portrayed mixed signals,” Freddie Mac Chief Economist Frank Nothaft said in the report.
Nothaft noted that the National Association of Realtors reported pending home sales were down for the fifth consecutive month.
But the S&P/Case-Shiller House Price index indicated prices in the 20 largest cities increased 13.3 percent annually in September, the highest year-over-year increase since February 2006, while the Federal Housing Finance Agency’s U.S.-wide Purchase-Only index appreciated 8.5 percent over the same period.
FHFA reported that 30-year fixed rates averaged 4.58 percent in October, 5 BPS better than in September.
Not much difference in the 30 year can be expected in Freddie’s next report based on Mortgage Daily’s analysis of Treasury market activity this week.
The yield on the 10-year Treasury note, which fixed mortgage rates track, averaged 2.73 percent during the period Freddie surveyed lenders this week, according to data from the Department of the Treasury. The 10-year yield closed at 2.74 percent Wednesday.
A majority of panelists surveyed by Bankrate.com for the week Nov. 27 to Dec. 5 agreed with Mortgage Daily’s forecast and expect no change in mortgage rates over the next week. A quarter predicted that rates will retreat by at least 3 BPS, and just 12 percent expected an increase.
The Mortgage Bankers Association’s latest forecast has 30-year rates averaging 4.4 percent in the fourth quarter, climbing to 4.7 percent the following quarter and rising further to 4.8 percent in the second quarter of next year.
The jumbo-conforming spread widened to 35 BPS in the U.S. Mortgage Market Index report from LoanSifter and Mortgage Daily for the week ended Nov. 22 from the previous week’s 23 BPS.
Freddie reported average 15-year fixed rates at 3.30 percent, just 3 BPS more than in the week ended Nov. 21.
Fifteen-year mortgages were more competitive this week, with borrowers receiving a 99-basis-point discount compared to 30-year borrowers. Last week’s spread was just 95 BPS.
A one-basis-point drop from last week left five-year, Treasury-indexed, hybrid, adjustable-rate mortgages averaging 2.94 percent, according to Freddie.
One-year Treasury-indexed ARMs averaged 2.60 percent, down from 2.61 percent in the prior report. Freddie said the one year averaged 2.56 percent in the week ended Nov. 29, 2012.
The yield on the one-year Treasury note, which is used to determine rate and payment adjustments on one-year ARMs, rose to 0.13 percent Wednesday from 0.12 percent last week, according to Treasury Department data.
Bankrate.com reported that the six-month London Interbank Offered Rate was 0.34 percent Wednesday, off from 0.35 percent seven days earlier.
ARM share fell to 6.7 percent in the most recent Mortgage Market Index report from the prior week’s 11.5 percent.