Although interest rates on consumer mortgages were higher on a monthly basis, a week-over-week reduction was recorded. Most industry economists see quarter-over-quarter increases ahead.
Thirty-year note rates on single-family loans closed during all of May averaged 4.84 percent, according to data reported by Ellie Mae Inc.
Mortgage rates were 5 basis points more than in the preceding month. During the same month last year, 30-year note rates averaged 4.33 percent.
Borrowers who closed on conventional mortgages had an average note rate of 4.86 percent. Loans insured by the Federal Housing Administration had an average rate of 4.89 percent, and rates were lowest on mortgages guaranteed by the Department of Veterans Affairs: 4.67 percent.
Freddie Mac reported in its Primary Mortgage Market Survey that 30-year fixed rates averaged 4.57 percent in the seven days ended June 21. That was a 5-basis-point improvement from a week earlier. But rates have worsened from 3.90 percent a year earlier.
“After a sharp run-up in the early part of 2018, rates have stabilized over the last three months, with only a modest up tick since March,” Freddie Mac Chief Economist Sam Khater said in the report.
Interest rates on residential loans will rise at least 3 BPS over the next week according to 38 percent of panelists surveyed by Bankrate.com for the week June 20 to June 26. But another 38 percent predicted a decline. Just 23 percent expected no changes ahead.
Freddie predicted in its May 2018 Economic & Housing Market Forecast that 30-year fixed rates will climb from 4.6 percent in the second quarter to 4.7 percent three months later and 4.9 percent in the fourth quarter.
Similarly, the Mortgage Bankers Association predicted in its MBA Mortgage Finance Forecast that 30-year rates will rise from 4.5 percent this quarter to 4.7 percent three months later and 4.9 percent in the final-three months of 2018.
At the American Bankers Association, its outlook is for 30-year fixed rates to climb from 4.57 percent in the second quarter to 4.74 percent the following three months and 4.82 percent in the fourth-quarter 2018.
In the
U.S. Mortgage Market Index report from Mortgage Daily and OpenClose for the week ended June 15, jumbo interest rates were 13 BPS higher than conforming rates. The prior report had the spread at 12 BPS.
At 4.04 percent in Freddie’s survey, 15-year fixed rates were 3 BPS less than in the last report.
The spread between 15- and 30-year rates thinned to 53 BPS from 55 BPS in the week ended June 14.
Freddie reported average five-year, Treasury-indexed, hybrid adjustable-rate mortgages at 3.83 percent, the same as in last week’s survey.
Freddie predicts hybrid rates will rise from 4.0 percent this quarter to 4.2 percent in the second quarter and 4.4 percent in the final-three months of this year.
Adjustments to hybrid ARM rates are dictated by the yield on the one-year Treasury note, which closed Thursday at 2.34 percent, off slightly from 2.35 percent seven days earlier.
A smaller batch of ARMs utilize the six-month London Interbank Offered Rate as the index. LIBOR was 2.50 percent as of Wednesday,
no different than the previous Wednesday, Bankrate.com reported.
Eventually replacing LIBOR will be the Secured Overnight Financing Rate, which was reported by the Federal Reserve Bank of New York at 1.87 percent yesterday, surging from 1.71 percent the preceding Wednesday.
In the most-recent Mortgage Market Index report, ARM share was 15.8 percent, wider than 14.6 percent the previous week.
Ellie’s report indicated that last month’s ARM share was 6.6 percent, no different than in April but wider than 6.1 percent in May 2017. ARM share was 7.2 percent on conventional transactions, 0.5 percent on FHA closings and 0.6 percent on VA mortgages.
