While monthly interest rates on residential loans headed north, weekly rates held steady. But stock market volatility could have fixed rates falling in next week’s report.
Ellie Mae Inc. reported in its
February 2018 Origination Insight Report that 30-year note rates on home loans that closed last month averaged 4.48 percent.
Rates jumped from January, when the average was 4.33 percent. A similar increase was recorded versus February 2017, when the average was 4.36 percent.
February 2018’s average was 4.52 percent on conventional mortgages, 4.51 percent on loans insured by the Federal Housing Administration and 4.24 percent on closings guaranteed by the Department of Veterans Affairs.
In Freddie Mac’s Primary Mortgage Market Survey for the week ended March 22, thirty-year fixed rates averaged 4.45 percent, hardly changed from 4.44 percent the prior week but much higher than 4.23 percent a year prior.
A Mortgage Daily analysis of Treasury market activity indicates that fixed mortgage rates could be approximately 5 basis points lower in Freddie’s next survey.
The 10-year Treasury yield, which is tracked by fixed mortgage rates, sank 6 BPS Thursday as the Dow Jones Industrial Average plummeted 724 points. The steep decline in stocks followed the signing of tariffs by President Donald J. Trump — a move that is expected by some to start a trade war with China.
But a plurality of panelists surveyed by Bankrate.com for the week March 21 to March 27 predicted mortgage rates will rise at least 3 BPS over the next week. Less than a third expected a decline, and under a quarter had rates not moving.
Freddie predicted in its March 2018 Economic & Housing Market Forecast that 30-year fixed rates will average 4.3 percent in the first quarter then climb to 4.5 percent three months later and reach 4.6 percent in the third quarter.
In its Housing Forecast: March 2018, rival secondary lender Fannie Mae expects long-term rates to average 4.2 percent this quarter, 4.4 percent during the following three months and 4.5 percent in the third quarter.
The Mortgage Bankers Association predicted in its
MBA Mortgage Finance Forecast that the 30 year will rise from 4.3 percent in the first quarter to 4.6 percent three months later and 4.7 percent in the third quarter.
In the U.S. Mortgage Market Index report from Mortgage Daily and OpenClose for the week ended March 16, jumbo interest rates were 9 BPS higher than conforming rates reported last week by Freddie. The spread thinned from 10 BPS the prior week.
Fifteen-year fixed rates inched up a basis point from last week to 3.91 percent in Freddie’s survey.
There was no week-over-week change in the 54-basis-point spread between 15- and 30-year rates.
Freddie reported that five-year, Treasury-indexed, hybrid adjustable-rate mortgages averaged 3.68 percent, also a basis point higher than in the last report.
Hybrid ARMs are forecast by Freddie to go from 3.6 percent this quarter to 3.9 percent in the second quarter and 4.1 percent the following three months.
Fannie expects
hybrid ARM rates to rise from 3.6 percent in the first quarter to 3.8 percent three months later and 3.9 percent in the third quarter.
Hybrid ARM rates are adjusted based on the one-year Treasury yield, which the Department of the Treasury reported closed at 2.05 percent Thursday, 2 BPS lower than seven days earlier.
A far less utilized ARM index, the six-month London Interbank Offered Rate, was 2.41 percent as of Wednesday, Bankrate.com reported. LIBOR jumped from 2.30 percent the preceding Wednesday.
ARM share in the latest Mortgage Market Index report was 16.2 percent, a little thinner than 16.7 percent the previous week.
Ellie’s report indicated ARM share was 5.5 percent in February 2018, the same as a month earlier and wider than 5.3 percent a year earlier. ARM share was 5.9 percent on conventional loans, 0.6 percent on FHA transactions and 0.3 percent on VA production.
