Mortgage rates moved lower this past week, and some indications are that there is likely to be little change in fixed rates in the next weekly report.
Fixed rates on 30-year residential loans averaged
3.71 percent in Freddie Mac’s Primary Mortgage Market Survey for the week ended March 24.
Thirty-year mortgage rates improved by 2 basis points compared to the previous week, while they were 2 BPS higher than in the same week last year.
“The Federal Reserve’s decision last week to maintain the current level of the federal funds rate combined with the reduction in their forecast for growth triggered a 3-basis point drop in the 10-year Treasury yield,” Freddie Mac Chief Economist Sean Becketti said in a written statement.
But Becketti added that comments this week by members of the Fed — including by the presidents of the Atlanta; Richmond, Virginia; and San Francisco banks — suggest a June rate hike is still on the table.
MBSQuotline Director Joe Farr reported that mortgage rates haven’t moved much since Freddie conducted its survey for this week.
“MBS prices are currently very close to where they were Monday and early Tuesday when the Freddie Mac survey was being conducted,” Farr explained in a written statement to Mortgage Daily. “As a result, the survey rate is close to Thursday’s actual mortgage rate.”
Fixed mortgage rates are unlikely to be much different in the next report, according to a Mortgage Daily analysis of Treasury market activity.
A majority of panelists surveyed by Bankrate.com for the week March 24 to March 30 agreed with Mortgage Daily that rate’s won’t move much over the next week. A quarter predicted rates will climb at least 3 BPS, and 17 percent projected a decline.
But Bankrate.com Chief Financial Analyst Greg McBride projects an increase.
“Some Fed members have been chirping about the need to resume rate hikes, perhaps as soon as April,” McBride said in a written statement to Mortgage Daily. “That, in conjunction with lots of economic data over the next week, will nudge mortgage rates up a bit.”
During the first quarter of this year, 30-year fixed rates are expected to average 3.8 percent, according to the Mortgage Bankers Association’s Mortgage Finance Forecast. The average is expected to climb to 4.0 percent in the second quarter and 4.1 percent the following three-month period.
Interest rates on jumbo mortgages were 2 BPS more than on conforming loans in the U.S. Mortgage Market Index report for the week ended March 18. The spread marks the first time jumbo rates exceeded conforming rates since the week ended June 19, 2015 — when the spread was 12 BPS.
Jumbo rates were less than a basis point cheaper than conforming rates in the week ended March 11, 2016.
Freddie reported 15-year fixed rates at 2.96 percent, down 3 BPS from the week ended March 17. The spread between 15- and 30-year rates widened to
75 BPS from 74 BPS in the last report.
At 2.89 percent, rates on five-year, Treasury-indexed, hybrid, adjustable-rate mortgages were down 4 BPS from a week prior, Freddie reported.
One-year ARM rates were 2.77 percent as of Thursday, according to HSH.com, up from 2.63 percent seven days earlier. Freddie previously reported that the one-year ARM averaged 2.46 percent in the week ended March 26, 2015.
One-year ARMs adjust based on the one-year Treasury note yield, which the Department of the Treasury reported at 0.63 percent as of today, off slightly from 0.64 percent one week earlier.
A less-utilized ARM index, the six-month London Interbank Offered Rate, was 0.90 percent as of Wednesday, Bankrate.com reported. LIBOR was 0.91 percent the previous Wednesday.
ARM share was
6.9 percent in the most-recent Mortgage Market Index report, thinning from 8.3 percent ARM share in the prior report.
