Fixed interest rates on residential loans slipped this past week and are potentially poised to descend even lower.
Thirty-year fixed rates averaged
3.93 percent in Freddie Mac’s Primary Mortgage Market Survey for the Week ended Aug. 20.
The 30 year was barely changed from seven days prior, when the average was 3.94 percent. It was 17 basis points better, however, than the same week last year.
Joe Farr, director at MBSQuoteline, noted in a written statement that mortgage rates have improved since Freddie conducted its survey.
In Ellie Mae Inc.’s Origination Insight report, 30-year fixed rates averaged 4.288 percent in July, up from 4.118 percent a month earlier but better than 4.388 percent a year earlier.
Ellie’s statistics indicated that 30-year rates were 4.364 percent on conventional mortgages, 4.243 percent on loans insured by the Federal Housing Administration and 4.095 percent on mortgages guaranteed by the Department of Veterans Affairs.
Mortgage Daily’s analysis of Treasury market activity indicates that fixed interest rates on home loans could be around seven BPS lower in next week’s report from Freddie.
Forty-two percent of panelists surveyed by Bankrate.com for the week Aug. 20 to Aug. 26 predicted rates will rise at least three BPS over the next week, the same share that predicted no change. Just 16 percent expected rates to fall.
On a longer-term basis, 30-year fixed rates are expected to average 4.1 percent in the current quarter, 4.3 percent in the fourth quarter and 4.6 percent in the first-quarter 2016, the Mortgage Bankers Association predicts.
In the U.S. Mortgage Market Index report from OpenClose and Mortgage Daily for the week ended Aug. 14, interest rates on jumbo mortgages were 19 BPS better than on their conforming counterparts. The jumbo-conforming spread widened from a negative 14 BPS one week prior.
At 3.15 percent, 15-year fixed rates were two BPS less than in Freddie’s survey for the week ended Aug. 13. The spread between 15- and 30-year rates widened to 78 BPS from
77 BPS in the last report.
Ellie reported that 15-year loans accounted for
9.2 percent of closings last month, a smaller share than 9.7 percent in June.
Freddie reported that five-year, Treasury-indexed, hybrid, adjustable-rate mortgages averaged 2.94 percent, a basis point more than in the previous report.
One-year Treasury-indexed ARMs averaged 2.62 percent, the same as in the prior report but more than 2.38 percent in the week ended Aug. 21, 2014, Freddie said.
The index for the one-year ARM, the yield on the one-year Treasury note, fell to 0.39 percent Thursday from 0.40 percent seven days prior, Treasury Department data indicate.
Another, less-utilized, ARM index, the six-month London Interbank Offered Rate, was 0.53 percent as of Wednesday, Bankrate.com reported. LIBOR was up a single basis from the prior week.
ARMs accounted for 5.5 percent of July originations, Ellie said. ARM share widened from 4.9 percent in
June but narrowed from 6.5 percent in July 2014.
ARM share for last month rose to 6.9 percent on conventional loans and dropped to 0.8 percent on government originations.
ARM share was 8.5 percent in the most-recent Mortgage Market Index report, thinning from 9.8 percent in the prior report.
