Volatility in global markets helped drag down long-term fixed rates on home loans to the lowest level in more than a year.
In Freddie Mac’s Primary Mortgage Market Survey for the week ended Oct. 16, thirty-year fixed rates averaged 3.97 percent.
That was the lowest average for 30-year rates since the week ended June 20, 2013, when the average was 3.93 percent.
Freddie Mac Chief Economist Frank Nothaft explained that mortgage rates slid “amidst continued investor skepticism regarding the precarious economic situation in Europe.”
Fixed rates are unlikely to be much different in Freddie’s next report based on this week’s Treasury market activity.
Data from the Treasury Department indicate that the 10-year Treasury yield, which is tracked by mortgage rates, averaged 2.18 percent during the days that Freddie’s conducted its survey. The 10-year yield closed at 2.17 percent Thursday.
At Bankrate.com, 45 percent of the panelists surveyed for the week Oct. 16 to Oct. 22 predicted rates will decline at least 3 basis points over the next week. The rest were evenly split about whether rates will increase or won’t move.
In the U.S. Mortgage Market Index report from LoanSifter/Optimal Blue and Mortgage Daily for the week ended Oct. 10, rates on jumbo mortgages were 12 BPS better than conforming rates. The jumbo-conforming spread was the same as in the previous report.
The average 15-year fixed rate was 3.18 percent in Freddie’s survey, tumbling from 3.30 percent in the week ended Oct. 9. Fifteen-year rates were 79 basis points less than 30-year rates, not as good as the 82-basis-point spread in the last report.
Freddie reported five-year, Treasury-indexed, hybrid, adjustable-rate mortgages at 2.92 percent, dropping from the 3.05 percent average seven days earlier.
At 2.38 percent, one-year Treasury-indexed ARMs were 4 BPS better than the average a week ago, Freddie reported. One-year ARMs averaged 2.63 percent in the week ended Oct. 17, 2014.
The yield on the one-year Treasury note, which determines changes to rates and payments on one-year ARMs, closed Thursday at 0.10 percent, unchanged over the past week.
Another ARM index, the six-month London Interbank Offered Rate, was 0.32 percent as of Wednesday, easing from 0.33 percent seven days earlier, according to Bankrate.com. It was the first time the index moved since June.
ARM share in the latest Mortgage Market Index report was 12.3 percent, the same as a week earlier.