The past week saw a decline in interest rates on residential loans. The outlook for the next seven days is for an even bigger reduction in rates.
Home loans that closed during April 2017 had an average 30-year note rate of 4.41 percent, up 2 basis points from the preceding month.
A far more substantial increase in mortgage rates was recorded compared to the same month last year, when the average was 4.10 percent.
Those details were reported by Ellie Mae Inc. in its April 2017 Origination Insight Report.
Ellie said rates averaged 4.51 percent in April on conventional loans, 4.36 percent on mortgages insured by the Federal Housing Administration and 4.15 percent on loans guaranteed by the Department of Veterans Affairs.
During just the seven days ended May 18, thirty-year fixed rates averaged 4.02 percent in Freddie Mac’s Primary Mortgage Market Survey. The 30 year fell from 4.05 percent the preceding week but was worse than 3.58 percent this week last year.
MBSQuoteline Director Joe Farr noted in a written statement to Mortgage Daily that Freddie’s survey didn’t reflect the bond market rally sparked by the Trump administration controversy. As a result, rates are lower than in Freddie’s survey.
A Mortgage Daily analysis of Treasury market activity suggests that fixed rates could be around 7 BPS lower in Freddie’s next report.
A majority of panelists surveyed by Bankrate.com for the week May 17 to May 23 agreed with Mortgage Daily and predicted mortgage rates will fall over the next week. Another 42 percent projected rates won’t move more than 2 BPS, and none expected an increase.
Fannie Mae predicted in its Housing Forecast: May 2017 that 30-year fixed rates will average 4.0 percent this quarter and 4.1 percent in the third and fourth quarters.
Interest rates on jumbo mortgages weren’t much different than conforming rates in the U.S. Mortgage Market Index report from Mortgage Daily and OpenClose for the week ended May 12. The jumbo-conforming spread was 3 BPS a week earlier.
Freddie’s survey had 15-year fixed rates averaging 3.27 percent, down 2 BPS from the week ended May 11. The spread between 15- and 30-year rates was 75 BPS, slightly thinner than 76 BPS the prior report.
At 3.13 percent, five-year, Treasury-indexed,
hybrid, adjustable-rate mortgages averaged 1 basis point less than in Freddie’s last survey.
Fannie predicts hybrid ARMs will average 3.2 percent in the second quarter and 3.3 percent in each of the following two quarters.
The index for hybrid ARMs, the yield on the one-year Treasury note, closed Thursday at 1.09 percent, down from 1.13 percent the previous Thursday, according to Treasury Department data.
A more obscure ARM index, the
six-month London Interbank Offered Rate, was 1.42 percent Wednesday, Bankrate.com reported. LIBOR was down from 1.45 percent seven days earlier.
Ellie’s report indicated that ARM share widened to 5.9 percent last month from 5.6 percent in March and 4.5 percent in April 2016.
ARM share was 10.6 percent in the most-recent Mortgage Market Index report, wider than 10.3 percent the previous week.
