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Mortgage Rates Linger Near All-Time Lows

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Fixed mortgage rates moved higher this week, but not by much — leaving them very near their lowest levels on record. Market signals suggest that mortgage rates will be little changed in next week’s report.

There was little change in the 30-year fixed-rate mortgage, with the average up 1 basis point from last week’s all-time low to 3.32 percent in Freddie Mac’s Primary Mortgage Market Survey for the week ended Nov. 29. A year earlier, the 30 year averaged 4.00 percent.

“Mortgage rates were virtually unchanged this week amid growing concerns around the fiscal cliff,” Freddie Mac Chief Economist Frank Nothaft commented in the report.

Freddie’s regulator, the Federal Housing Finance Agency, reported that average fixed rates on conventional, conforming loans for home purchases were 3.62 in September, down 14 BPS from August.

Mortgage rates aren’t likely to change much in Freddie’s next report, according to an analysis of Treasury market data by Mortgage Daily. The yield on the 10-year Treasury note — a benchmark for fixed mortgage rates — averaged 1.64 percent during the days that Freddie conducted this week’s survey based on data from the Department of the Treasury. The 10-year yield closed Thursday at 1.62 percent.

That sentiment was shared by 70 percent of panelists surveyed by Bankrate.com for the week Nov. 29 to Dec. 5. Fewer than a quarter predicted rates will decline at least 3 BPS over the next week, and just 7 percent forecasted an increase.

The U.S. Mortgage Market Index report from Mortech Inc. and Mortgage Daily for the week ended Nov. 21 indicated that jumbo mortgages were priced at a 53-basis point premium over conforming loans. Seven days earlier, the jumbo-conforming spread was 55 BPS.

A 1-basis-point rise from seven days earlier was recorded by Freddie for the 15-year fixed-rate mortgage, which averaged 2.64 percent. The discount for a 15-year mortgage was 68 BPS this week, the same as last week.

Freddie said that the five-year, Treasury-indexed, adjustable-rate mortgage averaged 2.72 percent this week, lower than 2.74 percent in the last report.

No change was tracked for the one-year Treasury-indexed ARM, which averaged 2.56 percent. The one year was 2.78 percent this week in 2011.

At 0.18 percent, the yield on the one-year Treasury note was 1 basis point higher than a week prior based on Treasury Department data.

The six-month London Interbank Offered Rate was reported by Bankrate.com at 0.53 percent as of Wednesday. LIBOR didn’t move from its perch a week earlier.

ARMs accounted for 2.4 percent of all activity in the latest Mortgage Market Index report, slightly wider than 2.3 percent in the previous report.

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