Despite a surge in mortgage rates this week, one barometer points to a decline by next week.
Jumping nearly a quarter percent, the average 30-year fixed-rate mortgage was 5.05 percent in Freddie Mac’s Primary Mortgage Market Survey for the week ended Thursday. The 30-year was 4.81 percent a week earlier and 4.97 percent a year earlier.
The weekly increase, according to Freddie’s chief economist, Frank Nothaft, was the result of “positive economic data reports.”
The 10-year Treasury yield climbed to 3.70 percent today from 3.58 percent last Thursday based on Treasury Department data. The 12-basis-point rise was less than the 24-basis-point increase for the 30-year mortgage — pointing to lower mortgage rates in the next set of reports.
But the majority of panelists surveyed by Bankrate.com for the week Feb. 10 to Feb. 16 predicted that mortgage rates will increase at least 3 BPS over the next week. The remaining 40 percent were evenly split over whether rates would fall or see no change.
The spread between the conforming 30-year fixed-rate mortgage and the jumbo 30-year loan improved to 66 BPS this week from last week’s 70 BPS, based on the Mortech-Mortgage Daily Mortgage Market Index report for the week ended Wednesday. The jumbo-conforming spread was also better than 88 BPS a year ago.
Climbing nearly as much as the 30-year, Freddie said the average 15-year fixed-rate mortgage jumped to 4.29 percent from 4.08 percent seven days prior.
A 23-basis-point jump was recorded with the five-year Treasury-indexed hybrid adjustable-rate mortgage by Freddie, which said the five-year averaged 3.92 percent.
A more mild 9-basis-point increase put the one-year Treasury-indexed ARM at 3.35 percent, Freddie said. The one-year was 4.33 during the same week last year.
The yield on the one-year Treasury, used as the index for the one-year ARM, closed today at 0.30 percent, higher than 0.29 percent seven days earlier. No change was reported by Bankrate.com for the six-month LIBOR.
ARM share rose to 5.9 percent in the Mortgage Bankers Association’s survey for the week ended Feb. 4 from 5.5 percent seven days prior.
Despite a 1 percent weekly decline in new refinance activity, the Mortgage Market Index climbed 10 percent from last week. A 23 percent surge in new purchase activity fueled the rise.