An increase in fixed rates on residential loans this past week is likely to be followed by little movement in mortgage rates over the upcoming week.
In the Primary Mortgage Market Survey from Freddie Mac for the week that ended on July 13, thirty-year fixed rates averaged 4.03 percent.
Long-term rates worsened compared to the previous week, when the average was 3.96 percent. They were also higher than 3.42 percent in the same week last year.
“After fully absorbing the sharp increases in Treasury yields over the past couple of weeks, the 30-year mortgage rate has cleared the psychologically important 4 percent mark for the first time since May,” Freddie Mac Chief Economist Sean Becketti said in the report.
Prices on mortgage-backed securities have slightly improved since Freddie conducted its survey, according to a written statement from MBSQuoteline Director of Sales and Marketing Joe Farr. The improvement is an indication that mortgage rates have also improved.
Fixed mortgage rates are unlikely to be much different in Freddie’s next survey based on a Mortgage Daily analysis of Treasury market activity.
A plurality of panelists surveyed by Bankrate.com as of July 12 agreed with Mortgage Daily’s forecast and predicted rates won’t move more than 2 BPS over the next week. A third expected an increase, and a quarter projected a decline.
In the U.S. Mortgage Market Index report from Mortgage Daily and OpenClose for the week ended July 7, interest rates on jumbo mortgages were 17 basis points higher than conforming rates. The jumbo-conforming spread widened from 12 BPS the preceding week.
Fifteen-year fixed rates averaged 3.29 in Freddie’s survey, leaping from 3.22 percent in the week ended July 6. The spread between 15- and 30-year rates
was 74 BPS, the same as in the last survey.
Freddie’s report had five-year, Treasury-indexed, hybrid, adjustable-rate mortgages averaging 3.28 percent, surging 7 BPS from the last report.
Treasury Department data indicate that the yield on the one-year Treasury note — which is used to determine rate changes on hybrid ARMs — was 1.23 percent Thursday, the same as seven days earlier.
Another ARM index, the six-month London Interbank Offered Rate, was 1.46 percent as of Wednesday, Bankrate.com reported. LIBOR was up a basis point from the prior Wednesday.
ARM share was 7.8 percent in the latest Mortgage Market Index report. thinning from 13.9 percent the prior week.
