Mortgage rates were modestly lower this week, and fixed rates could see further improvement in the next report.
Thirty-year fixed rates averaged 4.13 percent in Freddie Mac’s Primary Mortgage Market Survey for the week ended July 17.
Rates were little moved as economic data reported was light, according to Freddie Mac Chief Economist Frank Nothaft.
During June, 30-year fixed rates averaged 4.421 percent on closed loans, retreating from 4.530 percent the previous month, Ellie Mae reported. Conventional rates averaged 4.544 percent, while Federal Housing Administration rats were at 4.290 percent and Department of Veterans Affairs rates averaged 4.141 percent.
Treasury market activity suggests that fixed rates could be 8 BPS lower in Freddie’s next report.
A benchmark for fixed mortgage rates, the yield on the 10-year Treasury note, average 2.55 percent during the days that Freddie surveyed lenders this week, based on Treasury Department data. The 10-year yield closed at 2.47 percent Thursday.
Long-term Treasury yields slid amid speculation about the involvement of pro-Russian rebels in Ukraine in the crash of a Malaysian airliner carrying nearly 300 passengers.
But most — 86 percent — of the panelists surveyed by Bankrate.com for the week July 17 to July 23 predicted that rates won’t move more than 2 BPS over the next week, while 14 percent forecasted an increase. None expected lower rates ahead.
Economists at the National Association of Federal Credit Unions forecast that 30-year rates will average 4.4 percent for all of this year and 5.2 percent in 2015.
Jumbo mortgage rates were 8 BPS less than conforming rates in the U.S. Mortgage Market Index report from LoanSifter/Optimal Blue and Mortgage Daily for the week ended July 11, the same as one week prior.
At 3.23 percent, 15-year fixed rates averaged 1 basis point less than they did in Freddie’s survey for the week ended July 10. Fifteen-year rates were 90 BPS lower than 30-year rates, not quite as good as the 91-basis-point spread a week earlier.
A 2-basis-point week-over-week reduction left five-year, Treasury-indexed, hybrid, adjustable-rate mortgages averaging 2.97 percent in Freddie’s report.
One-year Treasury-indexed ARMs averaged 2.39 percent, a basis point lower than in Freddie’s previous survey and 27 BPS less than in the week ended July 18, 2013.
At 0.10 percent as of Thursday, the one-year Treasury yield was no different than seven days prior, according to the Treasury Department.
Bankrate.com reported that the six-month London Interbank Offered Rate was 0.33 percent Wednesday, the same a one week prior.
ARM share fell to 7.2 percent last month from 7.6 percent in May, Ellie said.
In the most-recent Mortgage Market Index report, ARM share climbed to 11.0 percent from 10.6 percent seven days earlier.