There was little change in fixed mortgage rates this week, but all indications are that interest rates on home loans will be lower in next week’s report.
In February, fixed rates on conforming, conventional 30-year mortgages averaged 4.11 percent, improving from 4.23 percent the previous month.
That was according to a survey
of mortgage lenders conducted by the Federal Housing Finance Agency for rates on loans used to finance home purchases.
Freddie Mac, which is regulated by FHFA, reported in its Primary Mortgage Market Survey for the week ended March 31 that 30-year fixed rates averaged 3.71 percent.
Although 30-year rates were no different than in Freddie’s last survey, they slipped a single basis point from the same week last year.
“Dovish comments by Federal Reserve Chair Janet Yellen on Tuesday triggered a rally in Treasury markets and drove the 10-year yield down 13 basis points from last week’s high,” Freddie Mac Chief Economist Sean Becketti stated in the report. “Yellen’s comments came too late to affect this week’s mortgage rate survey, and the 30-year mortgage rate remained unchanged at 3.71 percent.
“However, if the Fed’s cautious tone persists, mortgage rates may register the impact in subsequent weeks.”
Greg McBride, the chief financial analyst over at Bankrate.com, seemed to echo some of Becketti’s comments.
“Mortgage rates are moving lower as Janet Yellen has put any worries of an imminent rate hike to rest,” McBride said to Mortgage Daily in a written statement.
A Mortgage Daily analysis of Treasury market activity this week suggests that fixed mortgage rates could be around 6 BPS lower in Freddie’s next report.
But a majority of panelists surveyed by Bankrate.com for the week March 31 to April 6 predicted that rates won’t move more than 2 BPS over the next week. A decline was projected by 30 percent, and just 10 percent expected an increase.
In its
March 2016 Economic & Housing Market Forecast, Freddie predicted that 30-year fixed rates will go from 3.8 percent in the first quarter to 3.9 percent in the second quarter and 4.2 percent three months after that.
Interest rates on jumbo mortgages were just about the same as conforming rates in the U.S. Mortgage Market Index report from OpenClose and Mortgage Daily for the week ended March 25. The prior week, jumbo rates were 2 BPS more than conforming rates.
Freddie’s survey had 15-year fixed rates averaging
2.98 percent, 2 BPS higher than in the week ended March 24. The spread between 15- and 30-year rates thinned to 73 BPS from 75 BPS.
Five-year, Treasury-indexed, hybrid, adjustable-rate mortgages averaged 2.90 percent in Freddie’s latest report, a basis points more than one week prior.
Freddie forecasts that hybrid ARMs will climb from 2.9 percent in the first quarter to 3.1 percent three months later and 3.4 percent in the third quarter.
HSH.com reported that one-year Treasury-indexed ARMs averaged 2.98 percent as of Thursday, climbing from 2.77 percent seven days earlier. Freddie previously reported that one-year ARMs averaged 2.46 percent in the week ended April 2, 2015.
One-year ARMs adjust based on movement in the one-year Treasury yield, which
fell to 0.59 percent today from 0.63 percent last Thursday based on Treasury Department data.
The six-month London Interbank Offered Rate, which is also used as an ARM index, was 0.91 percent as of Wednesday, Bankrate.com reported. LIBOR was 0.90 percent the previous Wednesday.
ARM share climbed to 8.6 percent from 6.9 percent a week previous, according to the latest Mortgage Market Index report.
