A nice improvement was made on fixed mortgage rates this past week, and another improvement is possible by the next report.
A 7-basis-point drop from the previous week left 30-year fixed rates averaging 4.12 percent in Freddie Mac’s Primary Mortgage Market Survey for the week ended Thursday.
Rates have also improved from a year earlier, with the 30-year rate dropping 11 BPS from the week ended Oct. 10, 2013.
“Fixed mortgage rates were down on a week filled with bleak forward projections from the Federal Reserve and concern over growth in Europe,” Freddie Mac Chief Economist Frank Nothaft explained in the report.
Fixed rates could be in the neighborhood of 4 BPS lower in next week’s report based on Mortgage Daily’s analysis of Treasury market activity.
Fixed mortgage rates track the yield on the 10-year Treasury note, which averaged 2.38 percent during the period that Freddie surveyed lenders based on Treasury Department data. The 10-year yield closed at 2.34 percent Thursday.
But a majority of panelists surveyed by Bankrate.com for the week Oct. 9 to Oct. 15 disagreed with Mortgage Daily’s forecast and predicted mortgage rates won’t move over the next week. Forty-five percent projected that rates will decline at least 3 BPS, and none forecasted an increase.
Jumbo mortgage rates were 12 BPS less than conforming rates in the U.S. Mortgage Market Index report from LoanSifter/Optimal Blue and Mortgage Daily for the week ended Oct. 3. The jumbo-conforming spread widened from a negative 4 BPS seven days earlier.
Freddie’s survey said that 15-year fixed rates averaged 3.30 percent, 6 BPSÂ better than the week ended Oct. 2. But 15-year mortgages lost some of their appeal this week, with the spread between 15- and 30-year loans narrowing to 82 BPS from 83 BPS seven days earlier.
Five-year, Treasury-indexed, hybrid, adjustable-rate mortgages averaged 3.05 percent in Freddie’s survey, a single basis point less than in the previous report.
At 2.42 percent, one-year Treasury-indexed ARMs were the same as last week and 22 BPS better than a year earlier.
One-year ARMs adjust based on changes in the one-year Treasury yield, which was unchanged Thursday from a week earlier at 0.10 percent, according to Treasury Department data.
The six-month London Interbank Offered Rate hadn’t moved since June, and this week was no exception. Bankrate.com reported LIBORÂ at 0.33 percent as of Wednesday.
ARM share was 12.3 percent in the most-recent Mortgage Market Index report, fattening from 11.9 percent a week prior.
