Mortgage rates have hardly moved over the past three weeks, and at least one forecast suggests that fixed rates might continue to stay frozen.
Residential loans that were funded during January had an average 30-year note rate of
4.31 percent, soaring from 4.05 percent a month earlier.
But despite the week-over-week surge, rates on mortgages have hardly changed compared to 4.30 percent as of the same week a year earlier.
Ellie Mae Inc. reported the rates in its January 2017 Origination Insight Report.
On conventional mortgages, 30-year rates averaged 4.42 percent last month. Loans insured by the Federal Housing Administration had an average rate of 4.23 percent, while it was just 4.01 percent on mortgages guaranteed by the Department of Veterans Affairs.
In the week ended Feb. 16, 2017, Freddie Mac reported in its Primary Mortgage Market Survey that 30-year fixed rates averaged 4.15 percent. Rates moved down 2 basis points from the prior week but soared 50 BPS from a year prior.
The week-over-week dip came as Federal Reserve Board Chair Janet Yellen gave
testimony on the semiannual Monetary Policy Report before the Senate Committee on Banking, Housing, and Urban Affairs.
“Chair Yellen provided an upbeat assessment of recent economic progress,” National Association of Federally Insured Credit Unions Chief Economist Curt Long said in a statement. “While she left herself and the rest of the FOMC plenty of room to maneuver, she did suggest that a March rate hike is on the table. Investors remain somewhat skeptical, but a strong jobs report in three weeks could tilt expectations toward a move.”
Joe Farr, director at MBSQuoteline, said in a written statement to Mortgage Daily that a rally in mortgage-backed securities prices today offset MBS price declines earlier this week — leaving mortgage rates roughly where they were when Freddie conducted its survey.
A Mortgage Daily analysis of Treasury market activity indicates that fixed rates on home loans are unlikely to be much different in Freddie’s next survey, maybe 2 BPS lower.
But a majority of panelists surveyed by Bankrate.com for the week Feb. 16 to Feb. 22 predicted that rates will rise at least 3 BPS over the next week. No change was expected by 36 percent, and just 9 percent projected a decline.
Interest rates on jumbo mortgages in the week ended Feb. 10 were
11 BPS lower than conforming rates, according to the U.S. Mortgage Market Index report from OpenClose and Mortgage Daily. The jumbo-conforming spread widened from a negative 8 BPS the previous week.
Freddie reported average 15-year fixed rates at 3.35 percent, off 4 BPS from the week ended Feb. 9. Fifteen-year rates were 80 BPS lower than 30-year rates, more than the 78-basis-point spread in the last report.
At 3.18 percent, five-year, Treasury-indexed, hybrid, adjustable-rate mortgages were 3 BPS lower than a week prior.
The index for hybrid ARMs, the yield on the one-year Treasury note, was 0.86 percent as of Wednesday, according to Treasury Department data. The yield was 0.79 percent seven days earlier.
Another ARM index, the six-month London Interbank Offered Rate, was 1.34 percent as of Wednesday, Bankrate.com reported. There was no change from the previous Wednesday for LIBOR.
ARM share in the most-recent Mortgage Market Index report was 6.8 percent, thinning from 8.9 percent the prior week.
Ellie’s report had ARM share at 5.4 percent in January, widening from 4.6 percent a month earlier and 5.3 percent a year earlier.
