Over the past week, there was hardly any change in fixed rates on residential loans. More of the same is likely during the upcoming week.
In Freddie Mac’s Primary Mortgage Market Survey for the week that ended on Feb. 2, thirty-year fixed rates averaged 4.19 percent.
Long-term rates were the same as in the previous week’s report. But the 30 year was higher than 3.72 percent in the same week last year.
“The 10-year Treasury yield fell 5 basis points this week following a tepid advance estimate of fourth-quarter GDP and the Fed’s decision to leave rates unchanged,” Freddie Mac Chief Economist Sean Becketti stated in the report.
National Association of Federally Insured Credit Unions Chief Economist Curt Long weighed in on the Federal Open Market Committee’s decision Wednesday.
“Inflationary pressures are beginning to emerge, but not to the point that the Fed feels any immediate urgency to raise rates further,” Long said in a written statement. “In its last meeting Fed officials indicated that they expect three rate hikes in 2017, but today’s statement provided no clues on when the next one may come.”
MBSQuoteline Director Joe Farr said in a written statement to Mortgage Daily that mortgage rates as of Thursday aren’t much different than in Freddie’s report.
Mortgage rates are unlikely to be much different in Freddie’s next survey based on a Mortgage Daily analysis of Treasury market activity.
Forty percent of panelists surveyed by Bankrate.com for the week Feb. 2 to Feb. 8 agreed with Mortgage Daily and predicted rates won’t move more than 2 basis points over the next week. Another 40 percent expected an increase, and a fifth forecasted a downturn.
But if Friday’s employment report is strong, with more than 200,000 jobs added during January, rates could turn higher, while fewer than 150,000 jobs added could pull rates down.
In its January 2017 Economic & Housing Market Forecast, Freddie predicted that 30-year rates will average 4.3 percent in the first quarter, 4.4 percent in the following quarter and 4.5 percent in the second half.
In the NAFCU Economic & CU Monitor: Forecast January 2017, the trade group predicted that 30-year mortgage rates will average just 4.2 percent this year.
Jumbo rates were 8 BPS lower than conforming rates in the U.S Mortgage Market Index report from OpenClose and Mortgage Daily for the week ended Jan. 27. The jumbo-conforming spread widened from a negative 7 BPS the prior week.
Freddie’s survey had 15-year fixed rates averaging
3.41 percent, a basis point more than in the week ended Jan. 26, 2016. Fifteen-year rates were 78 BPS lower than 30-year rates. The spread thinned from 79 BPS in the prior report.
A 3-basis-point rise from a week ago left five-year, Treasury-indexed, hybrid, adjustable-rate mortgages averaging 3.23 percent in Freddie’s survey.
Hybrid ARMs are projected by Freddie to average 3.4 percent in the current quarter, 3.5 percent in the second quarter and 3.6 percent during the following three months.
The yield on the one-year Treasury note, which is utilized to determine rate changes on hybrid ARMs, was 0.84 percent as of today’s market close, according to Treasury Department data. The one-year yield was 0.82 percent seven days earlier.
Another, less-utilized, ARM index, the six-month London Interbank Offered Rate, was 1.35 percent as of Wednesday,
the same as of the previous Wednesday, according to Bankrate.com.
ARM share thinned to 8.5 percent in the most-recent Mortgage Market Index report from 9.0 percent a week earlier.
