Mortgage Rates Sink, Might Hold

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3 · 30 · 17

A nice improvement was recorded for weekly mortgage rates, and not much movement is likely for rates over the next seven days.

On conventional loans up to $424,100 used to finance a home purchase, 30-year fixed rates averaged 4.41 percent in February.

The report, from the Federal Housing Finance Agency, said long-term conforming rates rose 4 basis points from the prior month.

Mortgage rates have ascended 30 BPS from February 2016, according to FHFA, which based its findings on a small survey of mortgage lenders.

In the week ended March 30, thirty-year fixed rates averaged 4.14 percent, Freddie Mac reported in its Primary Mortgage Market Survey. The average tumbled from 4.23 percent a week earlier but was higher than 3.71 percent a year earlier.

In a note to Mortgage Daily, MBSQuoteline Director Joe Farr said prices on mortgage-backed securities have worsened slightly since Freddie completed its survey, indicating that mortgage rates have risen.

Fixed mortgage rates won’t likely be much different in Freddie’s next survey, maybe 2 or so BPS higher, based on a Mortgage Daily analysis of Treasury market activity.

Sixty-four percent of panelists surveyed by for the week March 28 to April 5 predicted rates won’t change over the next week. An increase of at least 3 BPS was expected by 18 percent, while another 18 percent forecasted a decline.

Freddie predicted in its
March 2017 Economic & Housing Market Forecast that 30-year fixed rates will go from 4.2 percent in the first quarter to 4.4 percent three months later then spend the next two quarters at 4.5 percent.

In the U.S. Mortgage Market Index report from Mortgage Daily and OpenClose for the week ended March 24, interest rates on jumbo mortgages were 11 BPS less than on conforming loans. The jumbo-conforming spread was 0.00 percent one week earlier.

Fifteen-year fixed rates averaged 3.39 percent in Freddie’s survey, retreating from 3.44 percent in the week ended March 23, 2017. Fifteen-year rate were 75 BPS less than 30-year rates. The spread was cut from
79 BPS the prior week.

Freddie reported that five-year, treasury-indexed, hybrid, adjustable-rate mortgages averaged 3.18 percent, 6 BPS less than in the previous report.

Hybrid ARMs are forecasted by Freddie to average 3.4 percent this quarter then rise 10 BPS each of the next two quarters.

Treasury Department data indicate that the yield on the one-year Treasury note, which serves as the index on hybrid ARMs, closed Thursday at 1.03 percent, rising from 0.99 percent seven days earlier.

Another ARM index, the six-month London Interbank Offered Rate, slipped to 1.42 percent as of Wednesday from
1.43 percent the previous Wednesday, reported.

ARM share was 7.3 percent in the most-recent Mortgage Market Index report, thinning from 9.2 percent one year previous.

In the American Bankers Association’s 24th Annual ABA Residential Real Estate Survey Report, 5/1 hybrid ARMs accounted for 6.7 percent of total 2016 mortgage originations by banks. Six-month ARMs represented 5.3 percent, while 7/1 ARMs made up 2.8 percent, and 3/1 ARMs accounted for 2.6 percent.


Mortgage Daily Staff


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