Interest rates on residential loans moved little this past week, and all indications are that another quiet week is ahead.
Freddie Mac reported in its Primary Mortgage Market Survey for the week ended April 23 that 30-year fixed rates averaged 3.65 percent.
The
average slipped from a week earlier, when it stood at 3.67 percent, and tumbled from the same week last year, when it was 4.33 percent.
Rates have worsened since Freddie conducted its survey, according to Joe Farr, director at MBSQuoteline.
“Since Freddie Mac conducted the survey early in the week, the reported rate does not reflect the 4 or 5 basis point rise in rate that followed Wednesday’s better than expected existing home sales report,” Farr said in a written statement.
Mortgage Daily’s analysis of Treasury market activity suggests that another week of little change in mortgage rates is ahead.
A majority of panelists surveyed by Bankrate.com for the week April 23 to April 29 agreed with Mortgage Daily’s forecast that rates won’t change much over the next week or so. Another 36 percent predicted that rates will rise at least three BPS, and just 9 percent expected a decline.
Fannie Mae projects that 30-year fixed rates will be 3.7 percent during the
current quarter then rise 10 BPS each of the following three quarters.
At the Mortgage Bankers Association, 30-year fixed rates are expected to go from 3.8 percent this quarter to 4.1 percent in the third quarter and 4.4 percent three months later.
The jumbo-conforming spread was
16 BPS in the U.S. Mortgage Market Index report from LoanSifter-Optimal Blue and Mortgage Daily for the week ended April 17, widening from 9 BPS in the prior report.
Freddie’s survey revealed that 15-year fixed rates averaged 2.92 percent, two BPS lower than in the week ended April 16. The difference between 15- and 30-year rates was unchanged from last week at
73 BPS.
At 2.84 percent in Freddie’s latest survey, five-year, Treasury-indexed, hybrid, adjustable-rate mortgages fell four BPS from the last report.
Fannie expects hybrid ARMs to average 3.0 percent in the second quarter then increase 10 BPS each quarter through the end of next year.
Freddie reported one-year Treasury-indexed ARMs at 2.44 percent, down from 2.46 percent the previous week but unchanged from
the week ended April 24, 2014.
In Fannie’s outlook, the one-year ARM is expected to average 2.5 percent this quarter and rise 10 BPS each of the following
six quarters.
One-year ARMs adjust with the one-year Treasury yield, which closed Thursday at 0.24 percent, two BPS higher than seven days prior, according to Treasury Department data.
Another ARM index, the six-month London Interbank Offered Rate, was
0.41 percent as of Wednesday, one basis point up from a week earlier, according to Bankrate.com.
The most-recent Mortgage Market Index report indicated that ARM share widened to 9.4 percent from 9.3 percent a week prior.
ARM share is expected by Fannie to be 8 percent in the second quarter and 9 percent in the second half.
