As markets waited for word from the Federal Reserve, rates on residential loans stayed put. But a decline in fixed rates might be in the offing.
Freddie Mac reported in its Primary Mortgage Market Survey for the week ended Sept. 17 that 30-year fixed rates averaged 3.91 percent.
The 30 year
was up just a single basis point versus one week prior. Compared to a year prior, 30-year rates have declined 32 basis points.
“Inflation fell shy of expectations in August, up 0.2 percent over the past year, but core consumer prices increased 1.8 percent year-over-year,”
Freddie Mac Chief Economist Sean Becketti said in the report.
Joe Farr, director at MBSQuoteline, said in a written statement that a strong rally in the prices of mortgage-backed securities following the Federal Reserve statement Thursday had mortgage rates moving down from when Freddie conducted its report.
In its Origination Insight
Report for August, Ellie Mae Inc. reported that 30-year fixed-rates on conforming loans averaged 4.313 percent in August, rising from 4.288 percent the previous month.
The 30-year averaged 4.384 percent on conventional loans last month, while it was 4.268 percent on mortgages insured by the Federal Housing Administration and
4.126 percent on loans guaranteed by the Department of Veterans Affairs.
Fixed interest rates on home loans might be around four BPS less in Freddie’s next report based on a Mortgage Daily analysis of Treasury market activity.
However, half of the panelists surveyed by Bankrate.com for the week Sept. 17 to Sept. 23 predicted that mortgage rates will increase at least three BPS over the next week. Another 40 percent projected a decline, and 10 percent expected no change.
Looking further into the future, Fannie Mae’s
Housing Forecast: September 2015 has 30-year fixed rates averaging 3.9 percent in the third and fourth quarters and 4.0 percent in the first-quarter 2016.
Interest rates on jumbo mortgages were 24 BPS less than on conforming loans, according to the U.S. Mortgage Market Index from OpenClose and Mortgage Daily for the week ended Sept. 11. The jumbo-conforming spread widened from a negative 20 BPS a week prior.
Freddie reported average 15-year fixed rates at 3.11 percent, a basis point more than in the week ended Sept 10. At 80 BPS, the spread between 15- and 30-year rates was no different than a week earlier.
Fifteen-year mortgages accounted for 9.8 percent of production in August, a wider share than 9.2 percent the previous month, Ellie reported.
Five-year, Treasury-indexed, hybrid, adjustable-rate mortgages moved up a basis point from a week previous to 2.92 percent, Freddie said.
Fannie predicted that hybrid ARMs will be 2.9 percent in the current quarter than rise 10 BPS every three months until the third-quarter 2016.
Average one-year Treasury-indexed ARMs dropped seven BPS from seven days earlier to 2.56 percent but were up from 2.43 percent in the week ended Sept. 18, 2014, Freddie said.
One-year ARMs are expected by Fannie to average 2.6 percent in the third quarter then increase 10 BPS each quarter after that through the third quarter of next year.
The yield on the one-year Treasury note, which serves as the index for one-year ARMs, closed Thursday at 0.39 percent, the same as a week earlier, according to Fed data.
Another ARM index, the six-month London Interbank Offered Rate, was 0.54 percent as of Wednesday, unchanged from the last report, Bankrate.com reported.
At 12.1 percent, ARM share in the most-recent Mortgage Market Index report was wider than 10.8 percent a week earlier.
On loans closed during August, Ellie said ARM share was 5.6 percent, inching up from 5.5 percent in July.
