Mortgage Daily Logo

Mortgage Rates Slip, Unlikely to Move Much


Fixed mortgage rates dipped below 4 percent and aren’t likely to move much by the next report. Longer term, however, the outlook is for an increase.

A 2-basis-point improvement over last week left 30-year fixed rates averaging 3.99 percent in Freddie Mac’s Primary Mortgage Market Survey for the week ended Nov. 21.

The decline was even more significant compared to the same week last year, with a 23-basis-point decline reported on a year-over-year basis.

“Fixed mortgage rates were slightly down as housing starts declined 2.8 percent in October below the upwardly revised September rate,” Freddie Mac Chief Economist Frank Nothaft explained in the report. “However, building permits increased 4.8 percent in October after a 2.8 percent boost a month earlier. Lastly, industrial production slipped by 0.1 percent in October, below the market consensus forecast.”

Ellie Mae Inc. reported in its Origination Insight Report October 2014 that average 30-year fixed rates slipped to 4.371 percent last month from 4.381 percent in September.

In next week’s survey from Freddie, fixed rates aren’t likely to much different, according to an analysis of Treasury market activity.

Data from the Department of the Treasury indicate that the yield on the 10-year Treasury note — a benchmark for fixed mortgage rates — averaged 2.34 percent during the period covered by Freddie’s survey, while it closed Thursday at 2.34 percent.

An overwhelming majority of panelists surveyed by for the week Nov. 20 to Nov. 26 agreed with Mortgage Daily’s forecast and predicted that rates won’t move more than 2 BPS during the next week. An increase was forecasted by 31 percent, and none expected a decline.

Freddie’s November 2014 U.S. Economic & Housing Market Outlook has 30-year fixed rates averaging 4.0 percent during the current quarter then rising to 4.2 percent in the first-quarter 2015 and 4.5 percent during the following three-month period.

Federal Reserve Bank of Cleveland Vice President LaVaughn Henry told a Kentucky State University audience Tuesday that interest rates could be 1 percent higher by this time next year, the Lexington Herald-Leader reported.

Interest rates on jumbo mortgages were 9 BPS higher than on conforming loans in the U.S. Mortgage Market Index report from LoanSifter/Optimal Blue and Mortgage Daily for the week ended Nov. 7. The jumbo-conforming spread slipped from 10 BPS the previous week.

Three BPS were trimmed off of 15-year fixed rates from the week ended Nov. 13, leaving the 15 year averaging 3.17 percent in Freddie’s latest survey. The spread between 15- and 30-year mortgages widened to 82 BPS in the latest report from 81 BPS a week earlier.

Fifteen-year mortgages accounted for 9.6 percent of October production in Ellie’s report, up from 9.1 percent in September.

Freddie reported that five-year, Treasury-indexed, hybrid, adjustable-rate mortgages averaged 3.01 percent, 1 basis point better than in the previous report.

Freddie forecasts that hybrid ARM rates will go from 3.0 percent in the fourth quarter to 3.2 percent in the first three months of next year and 3.4 percent in the second-quarter 2015.

One-year Treasury-indexed ARMs averaged 2.44 percent in Freddie’s survey, a basis point higher than last week but 17 BPS better than the week ended Nov. 21, 2013.

One-year ARMs are forecasted by Freddie to be 2.5 percent during the final three months of 2014 and the first three months of 2015 then rise to 2.6 percent in the second quarter of next year.

The yield on the one-year Treasury note, which sets the one-year ARM rate, slipped to 0.14 percent Thursday from 0.15 percent seven days prior, according to the Treasury Department data.

The six-month London Interbank Offered Rate, which is used as an index on some subprime ARMs, was 0.33 percent as of Wednesday, reported, the same as a week earlier.

Ellie reported that ARM share was 6.3 percent in October, the same as a month earlier.

In the latest weekly Mortgage Market Index report, ARM share was 10.9 percent, narrowing from 11.3 percent one week prior.

Freddie’s forecast has ARM share going from 11 percent in the fourth quarter to 12 percent three months later and 13 percent in the second-quarter 2015.

Related Posts

Mortgage Rates Up 92 BPS From Year Ago

Mortgage Rates Up 92 BPS From Year Ago

Over the past year, weekly fixed interest rates on single-family loans have soared 92 basis points. But little change was reported from last week, and more of the same is expected. On conventional loans utilized to finance a home purchase with amounts up to the...

Mortgage Rates Up 92 BPS From Year Ago

Mortgage Rate Forecasts Have Little Change Ahead

Thirty-year mortgage rates moved lower this past week and this past month. Short- and long-term forecasts have little movement ahead for mortgage rates. Ellie Mae Inc.'s Origination Insight Report | September 2018 indicated that average 30-year note rates on...

Mortgage Rates Up 92 BPS From Year Ago

Mortgage Rates Soar, Could Sink in Next Report

An expected surge in mortgage rates came to fruition this week. The latest forecast has fixed rates tumbling in next week's report. A new index for adjustable-rate mortgages moved lower. A stunning 19-basis-point surge from the preceding week left average 30-year...

Mortgage Rates Up 92 BPS From Year Ago

Mortgage Rates Dip, But Likely to Skyrocket

Mortgage rates retreated a modest amount just one week after climbing to a seven-year high. The next rate report, however, is likely to reflect significant escalation. Prospective 30-year borrowers using the LendingTree network during September were offered an average...

Mortgage Rates Up 92 BPS From Year Ago

Mortgage Rates Little Changed, More of Same Ahead

Over the past week, there was little change in interest rates on home loans. During the next week, more of the same is likely. Recently rising rates have helped the Federal Home Loan Banks' earnings. Conventional mortgages with conforming loan amounts used to finance...

Popular posts

How Long Does It Take to Refinance a Mortgage
How Long Does It Take to Refinance a Mortgage

So, you’re interested in refinancing your mortgage. Maybe you want some extra capital to do that home project you’ve always dreamed of, interest rates are nearing record lows, or you want to start consolidating debt. Regardless of the motivation behind the refinance,...

How Does Refinancing a Mortgage Work
How Does Refinancing a Mortgage Work

A home purchase is considered an investment, and a robust one at that. Savvy owners are constantly looking for new ways to reduce debt, save money, pay less in interest, and ultimately build equity. Refinancing is one way to leverage your investment and do just that....

What Does It Mean to Refinance Your Home
What Does It Mean to Refinance Your Home

You can think of refinancing your mortgage as a debt redo. Essentially, you’ll swap out the existing loan for a new one - ideally with better terms and conditions. Only this time it could help you save money on high mortgage payments, rather than just borrow it....

Setting up the Utilities in My New House
Setting up the Utilities in My New House

All the tedious, time-consuming paperwork has been signed, sealed, and delivered. Your belongings are packed into what seems like a million boxes and you have a solid plan to haul all your existing furniture to the new place. Just as your boxes and furniture need to...

When Is My First Mortgage Payment Due?
When Is My First Mortgage Payment Due?

Navigating your way through a brand-new mortgage loan can be a difficult task, especially for first-time homeowners.   After handing over a large sum of money for the down payment and closing costs, it’s important to pay attention to the timing of your first...


Don’t worry, we don’t spam