An improvement was reported for interest rates on residential loans, and some signs point to a further decline over the next week.
At 3.62 percent in the week ended Feb. 25, thirty-year fixed rates averaged three basis points less than as of seven days previous.
That was according to Freddie Mac’s Primary Mortgage Market survey, which had the 30-year at
3.80 percent a year earlier.
“Since the beginning of 2016, 30-year rates have fallen almost 40 basis points helping housing markets sustain their momentum into this year,” Freddie Mac Chief Economist Sean Becketti stated in the report. “Earlier this week, the National Association of Realtors announced existing home-sales were up 4 percent month-over-month in January and up 11 percent from last year.”
A Mortgage Daily analysis indicates that fixed rates are likely to be around four basis points better in Freddie’s next survey.
Forty-six percent of panelists surveyed by Bankrate.com for the week Feb. 25 to March 2 projected that mortgage rates won’t move more than two BPS over the next week. The remaining 54 percent were evenly split over whether rates will rise or fall.
But Bankrate.com Chief Financial Analyst Greg McBride sees a slight improvement ahead.
“Concerns about oil prices and market volatility continue to be the drivers, but as long as the economic fundamentals are in decent shape, mortgage rates won’t fall too much further,” McBride said in a written statement.
Looking out further, the Mortgage Bankers Association predicted in its
MBA Mortgage Finance Forecast that 30-year rates will average 3.8 percent this quarter, 4.0 percent in the second quarter and 4.1 percent during the following three months.
During all of
January, 30-year fixed rates on purchase-money mortgages averaged 4.23 percent, the Federal Housing Finance Agency reported, up from 4.20 percent in December.
Fifteen-year fixed rates averaged 2.93 percent in Freddie’s survey, two BPS better than in the last report. The spread between 15- and 30-year rates thinned to 69 BPS from 70 BPS in the week ended Feb. 18.
A six-basis-point improvement from the previous report left five-year, Treasury-indexed, hybrid, adjustable-rate mortgages averaging 2.79 percent in Freddie’s survey.
As of
Wednesday, HSH.com had one-year ARMs averaging 2.41 percent, lower than 2.49 percent seven days earlier. Freddie previously reported the one-year ARM at 2.44 percent as of the week ended Feb. 26, 2015.
One-year ARMs adjust based on movement in the one-year Treasury yield, which the Department of the Treasury reported at 0.56 percent as of the close of the market Thursday, three BPS higher than one week prior.
Some other ARMs utilize the six-month London Interbank Offered Rate as an index. LIBOR was 0.88 percent as of Wednesday, according to Bankrate.com, up modestly from 0.87 percent a week prior.
ARM share was 7.7 percent in the U.S. Mortgage Market Index report from OpenClose and Mortgage Daily for the week ended Feb. 19, thinning from 8.5 percent seven days earlier.
