Interest rates on home loans moved lower this past week and are likely to drift down further if tomorrow’s employment report isn’t too robust.
Thirty-year fixed rates averaged 3.97 percent in the Primary Mortgage Market Survey published by Freddie Mac for the week ended Jan. 7.
Freddie Mac Chief Economist Sean Becketti attributed the week-over-week decline in mortgage rates to a
flight to safety amid a global equity selloff in response to concerns about overseas economic developments.
Joe Farr, director at MBSQuoteline, noted that mortgage rates have recently been improving.
“MBS prices were at the worst levels of the December when last week’s survey was conducted,” Farr said in a written statement. “Due [to] increased geopolitical tensions and weakness in global economic activity, MBS prices have been on steep path higher since then.”
Based on Mortgage Daily’s analysis of Treasury market activity, fixed rates could be around six BPS lower in Freddie’s next survey — though rates could turn higher if tomorrow’s employment report is strong.
But less than a quarter of panelists surveyed by Bankrate.com for the week Jan. 7 to Jan. 13 predicted that mortgage rates will fall over the next week. The remaining 76 percent were evenly split about whether rates will rise at least three BPS or stay where they are.
Freddie reported that 15-year fixed rates averaged 3.26 percent, two BPS higher than in the week ended Dec. 31, 2015.
At 3.09 percent, Treasury-indexed, hybrid, adjustable-rate mortgages averaged a basis point more than as of seven days earlier, according to Freddie’s report.
The one-year Treasury yield, which is used as an index on one-year adjustable-rate mortgages, closed Thursday at 0.66 percent, a basis point more than one week prior, according to Treasury Department data.
An index utilized on other adjustable-rate mortgages, the six-month London Interbank Offered Rate, was 0.85 percent as of Wednesday, Bankrate.com reported. LIBOR climbed from 0.83 percent seven days earlier.
Rate locks for ARMs accounted for 21.3 percent of all activity in the U.S. Mortgage Market Index report from OpenClose and Mortgage Daily for the week ended Jan. 1. ARM share soared from 11.9 percent the prior week.