A decline was reported for rates on residential loans this past week, and one indicator suggests that they might descend further.
At 3.60 percent, interest rates on 360-month fixed-rate loans averaged 6 basis points less than the did in the period a week earlier.
Those figures were based on the Freddie Mac Primary Mortgage Market Survey for the week that concluded on June 9, 2016.
“Growing optimism about the state of the economy was quickly erased with May’s employment report,” Sean Becketti, senior economist at Freddie, said in the report. “The disappointing release caused an immediate flight to quality resulting in the 10-year Treasury yield dropping 10 basis points on Friday.”
Freddie’s interest rate data indicate that
30-year fixed rates were much lower than the 4.04 percent average during the same week one year previous.
Conditions have only improved since Freddie’s survey took place, according to Joe Farr, director at MBSQuoteline.
“Mortgage rates have fallen a little father in the days following the survey,” Farr said in a written statement. “If the survey was conducted today, it may show the best rate of the year.”
Rates could drop another 4 BPS or so in Freddie’s next report, according to an analysis of Treasury market data by Mortgage Daily.
But 60 percent of panelists surveyed by Bankrate.com for the week June 9 to June 15 expect mortgage rates to stay within 2 basis points of their current levels. Another 10 percent predicted an increase — and just 30 percent agreed with Mortgage Daily’s forecast of falling rates.
Longer term, the American Bankers Association predicts that
conventional mortgage rates will climb from 3.65 percent in the second quarter to 3.77 percent three months later then rise to 3.86 percent in the fourth quarter.
Rates on jumbo mortgages were 9 BPS more than on conforming loans in the U.S. Mortgage Market Index report from OpenClose and Mortgage Daily for the week ended June 3. The jumbo-conforming spread was trimmed from 11 BPS in the prior-week report.
A 5-basis-point week-over-week descension
put 15-year fixed rates at 2.87 percent in Freddie’s survey. The spread between 15- and 30-year mortgages dipped to 73 BPS from 74 BPS one week prior.
Five-year, Treasury-indexed, hybrid, adjustable-rate mortgages averaged 2.82 percent in Freddie’s most-recent report. Hybrid ARMs improved by 6 basis points from the week ended June 2.
Another report, from HSH.com, indicated one-year Treasury-indexed ARMs averaged 2.74 percent as of Thursday,
up from 2.60 percent seven days earlier.
Freddie previously reported that one-year ARMs averaged
2.53 percent in the week ended June 11, 2015.
The index for the one-year ARM — the one-year Treasury yield — closed Thursday at 0.59 percent, according to Treasury Department data. The one-year yield sank from 0.68 percent one week prior.
The 6-month London Interbank Offered Rate came in at 0.95 percent for the week ended June 8, Bankrate.com reported. LIBOR slipped from 0.98 percent in the prior week’s report.
Also down from a week previous was ARM share, which thinned to 7.7 percent in the most-recent Mortgage Market Index report compared to 11.5 percent.
