It was a good week for interest rates on residential loans, and bond market activity suggests that a further decline could be ahead.
Thirty-year fixed rates averaged 3.86 percent in Freddie Mac’s Primary Mortgage Market Survey for the week ended Sept. 24.
That put long-term fixed rates at five basis points less than a week earlier and 34 BPS under the same week last year.
“Global growth concerns and lackluster inflation convinced the Fed to defer a hike in the Federal funds rate,” Freddie Mac Chief Economist Sean Becketti said of the latest movement in mortgage rates.
Mortgage rates have improved a little more since Freddie conducted this week’s survey, according to MBSQuoteline Director Joe Farr.
An analysis of Treasury market activity by Mortgage Daily points to a possible four-or-so-basis-point improvement in Freddie’s next survey.
A majority of panelists surveyed by Bankrate.com for the week Sept. 24 to Sept. 30 were a little less optimistic than Mortgage Daily, predicting no change over the next week for mortgage rates. An decrease of at least three BPS was forecasted by 30 percent of the panelists, while just 10 percent expected an increase.
A forecast from the Mortgage Bankers Association has 30-year fixed rates averaging 4.0 percent in the third quarter then climbing 20 BPS each of the following two quarters.
Jumbo mortgage rates were 22 BPS less than their conforming counterparts in the U.S. Mortgage Market Index report from OpenClose and Mortgage Daily for the week ended Sept. 18. The jumbo-conforming spread narrowed from a negative 24 BPS one week prior.
Freddie’s survey had 15-year fixed rates averaging
3.08 percent, three BPS less than in the week ended Sept. 17. At 78 BPS, this week’s spread between 15- and 30-year rates slipped from 80 BPS in the last report.
A one-basis-point drop from a week earlier left five-year, Treasury-indexed, hybrid, adjustable-rate mortgages averaging 2.91 percent in Freddie’s latest survey.
One-year Treasury-indexed ARMs averaged 2.53 percent, according to Freddie. The one-year ARM was 2.56 percent the previous week and 2.43 percent in the week ended Sept. 25, 2014.
One-year ARMs adjust based on movement in the one-year Treasury yield, which the Department of the Treasury reported plunged to 0.32 percent as of Thursday from 0.39 percent seven days prior.
Another ARM index, the six-month London Interbank Offered Rate — or LIBOR — was 0.53 percent as of Wednesday,
slightly off the 0.54 percent a week earlier, according to Bankrate.com.
ARM share fell to 11.8 percent in the latest Mortgage Market Index report from 12.1 percent a week previous.
