Mortgage Daily Logo

Rates Higher, Outlook Mixed


Mortgage rates jumped, though the country’s central bank has no plans to raise rates any time soon. In forecasting mortgage rates, activity in long-term Treasury bonds points a different direction than the prediction of a panel of professionals. Weekly mortgage activity barely changed, though fewer applicants opted for adjustable rates.

The average 30-year fixed-rate mortgage shot up 13 basis points from the prior week to 4.94% in Freddie Mac’s Primary Mortgage Market Survey for the week ended Dec. 17. Compared to the prior year, the 30-year was 25 BPS better.

The 10-year Treasury Note yield was 3.527% during trading today, according to The 10-year yield closed at 3.49% last Thursday, U.S. Department of the Treasury data indicated. The movement suggests fixed rates might be lower in next week’s mortgage survey.

But a plurality of panelists surveyed by for the week Dec. 17 to Dec. 23 predicted mortgage rates would not move more than 2 BPS during the next 35 to 45 days. One-third expected an increase, while just over a quarter projected a decline.

The Federal Reserve’s Open Market Committee yesterday issued a statement giving no indication that it plans to raise the target range for the federal funds rate above the 0.0% to 0.25% now. The Fed said that it “continues to anticipate that economic conditions — including low rates of resource utilization, subdued inflation trends and stable inflation expectations — are likely to warrant exceptionally low levels of the federal funds rate for an extended period.”

The central bank noted improvement in economic activity and in the housing sector as well as a decline in the labor market’s deterioration.

Just 6 BPS higher than the previous week, the average 15-year fixed-rate mortgage was 4.38% in Freddie’s survey.

At 4.37%, the five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 11 BPS more than a week earlier, Freddie said.

Freddie reported that the one-year Treasury-indexed ARM averaged 4.34%, 0.10% higher than a week prior but 0.60% better than the same week in 2008. The underlying index, the yield on the one-year Treasury bill, closed yesterday at 0.38%, higher than 0.31% seven days prior.

A widely used index on subprime ARMs, the six-month London Interbank Offered Rate, was 0.45% yesterday, reported. LIBOR was 0.47% a week earlier.

Despite a surge in fixed rates last week without a corresponding rise in the one-year, ARM share declined to 4.1% in the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ended Dec. 11 from 4.7% a week earlier.

MBA said total applications nudged up less than 1% on a seasonally adjusted basis from the prior week — with refinances up 1% and purchases off less than 1%. The refinance share edged up to three-quarters.

Related Posts

Mortgage Rates Up 92 BPS From Year Ago

Mortgage Rates Up 92 BPS From Year Ago

Over the past year, weekly fixed interest rates on single-family loans have soared 92 basis points. But little change was reported from last week, and more of the same is expected. On conventional loans utilized to finance a home purchase with amounts up to the...

Mortgage Rates Up 92 BPS From Year Ago

Mortgage Rate Forecasts Have Little Change Ahead

Thirty-year mortgage rates moved lower this past week and this past month. Short- and long-term forecasts have little movement ahead for mortgage rates. Ellie Mae Inc.'s Origination Insight Report | September 2018 indicated that average 30-year note rates on...

Mortgage Rates Up 92 BPS From Year Ago

Mortgage Rates Soar, Could Sink in Next Report

An expected surge in mortgage rates came to fruition this week. The latest forecast has fixed rates tumbling in next week's report. A new index for adjustable-rate mortgages moved lower. A stunning 19-basis-point surge from the preceding week left average 30-year...

Mortgage Rates Up 92 BPS From Year Ago

Mortgage Rates Dip, But Likely to Skyrocket

Mortgage rates retreated a modest amount just one week after climbing to a seven-year high. The next rate report, however, is likely to reflect significant escalation. Prospective 30-year borrowers using the LendingTree network during September were offered an average...

Mortgage Rates Up 92 BPS From Year Ago

Mortgage Rates Little Changed, More of Same Ahead

Over the past week, there was little change in interest rates on home loans. During the next week, more of the same is likely. Recently rising rates have helped the Federal Home Loan Banks' earnings. Conventional mortgages with conforming loan amounts used to finance...

Popular posts

How Long Does It Take to Refinance a Mortgage
How Long Does It Take to Refinance a Mortgage

So, you’re interested in refinancing your mortgage. Maybe you want some extra capital to do that home project you’ve always dreamed of, interest rates are nearing record lows, or you want to start consolidating debt. Regardless of the motivation behind the refinance,...

How Does Refinancing a Mortgage Work
How Does Refinancing a Mortgage Work

A home purchase is considered an investment, and a robust one at that. Savvy owners are constantly looking for new ways to reduce debt, save money, pay less in interest, and ultimately build equity. Refinancing is one way to leverage your investment and do just that....

What Does It Mean to Refinance Your Home
What Does It Mean to Refinance Your Home

You can think of refinancing your mortgage as a debt redo. Essentially, you’ll swap out the existing loan for a new one - ideally with better terms and conditions. Only this time it could help you save money on high mortgage payments, rather than just borrow it....

Setting up the Utilities in My New House
Setting up the Utilities in My New House

All the tedious, time-consuming home closing documents have been signed, sealed, and delivered. Your belongings are packed into what seems like a million boxes and you have a solid plan to haul all your existing furniture to the new place. Just as your boxes and...

When Is My First Mortgage Payment Due?
When Is My First Mortgage Payment Due?

Navigating your way through a brand new mortgage loan can be a difficult task, especially for first time homeowners. After handing over a large sum of money for the down payment and closing costs, it’s important to pay attention to the timing of your first mortgage...


Don’t worry, we don’t spam

calculate your monthly mortgage payment

Related Topics

Helpful Links

Daily mortgage rate trends

Best mortgage lenders

First-time homebuyers programs by state

Loan limits by state

Types of mortgages

APR vs interest rate

Understanding PMI