Home-loan rates crept higher during this past week on a robust jobs data report, and multiple signs suggest that not much change is likely in the next mortgage rate report.
A 2-basis-point increase from the prior week left 30-year fixed rates averaging 3.45 percent in Freddie Mac’s Primary Mortgage Market Survey for the week ended Aug. 11.
In the report, Freddie Mac Chief Economist
Sean Becketti attributed the week-over-week increase in mortgage rates to a strong employment report for the month of July.
Still, fixed rates on residential loans have improved considerably compared to the same week in the previous year, when long-term mortgage rates averaged 3.94 percent.
Joe Farr, director at MBSQuoteline, told Mortgage Daily in a written statement that prices on mortgage-backed securities have improved since the majority of respondents submitted their rates to Freddie, indicating that actual Thursday morning rates were a little better than those reported in Freddie’s survey.
Fixed rates on home loans are likely to be little changed, maybe a couple basis points higher, in Freddie’s next survey based on a Mortgage Daily analysis of Treasury market activity.
Seventy percent of panelists surveyed by Bankrate.com for the week Aug. 10 to Aug. 16 agreed with Mortgage Daily’s forecast and predicted mortgage rates won’t move more than 2 BPS over the next week. A fifth foresaw a decline, and just a 10th expected an increase.
Also concurring with the Mortgage Daily projection was Bankrate.com Chief Financial Analyst Greg McBride.
“The market is still skeptical about a rate hike before December, so unless or until Janet Yellen sends a different message, mortgage rates will remain range bound,” McBride said in a written statement to Mortgage Daily.
Jumbo mortgage rates were 11 BPS more than conforming rates in the U.S. Mortgage Market Index report from OpenClose and Mortgage Daily for the week ended Aug. 5. The jumbo-conforming spread thinned from 15 BPS one week prior.
Freddie’s report had 15-year fixed rates averaging 2.76 percent, 2 BPS higher than in the week ended Aug. 4. Fifteen-year rates were
69 BPS lower than 30-year rates, the same spread as in the last survey.
A 1-basis-point rise from a week earlier left five-year, Treasury-indexed, hybrid, adjustable-rate mortgages averaging 2.74 percent in Freddie’s latest survey.
One-year ARMs were 2.64 percent as of Thursday, up 10 BPS from seven days earlier. One-year ARMs averaged 2.62 percent in the week ended Aug. 13, 2015, Freddie previously reported.
Interest rates on one-year ARMs adjust based on the one-year Treasury yield, which rose to 0.55 percent Thursday from 0.51 percent a week prior, according to Treasury Department data.
A less-utilized ARM index, the six-month London Interbank Offered Rate, soared to 1.20 percent Wednesday
from 1.13 percent a week previous, Bankrate.com reported.
ARM share was cut to 5.5 percent in the most-recent Mortgage Market Index report from 7.1 percent in the week ended July 29.
