Fixed mortgage rates sank this past week and are likely to maintain their low levels in the next report.
Thirty-year fixed rates averaged 3.89 percent in Freddie Mac’s Primary Mortgage Market Survey for the week ended Dec. 4.
Long-term fixed rates dropped from 3.97 percent in the previous report. Compared to the same week in 2013, 30-year fixed rates were down by 57 basis points.
“Mortgage rates were down across the board on a week of underwhelming economic releases,” Freddie Mac Chief Economist Frank Nothaft explained in the report. “New home sales missed consensus expectations by selling at an annual pace of 458,000 units in October, and the National Association of Realtors reported that pending home sales dipped in October by 1.1 percent. The ADP’s estimate for payroll growth in November was 208,000 jobs, under expectations of 225,000.”
Not much change is likely in Freddie’s next survey based on Treasury market activity.
A benchmark for fixed mortgage rates, the yield on the 10-year Treasury note, averaged 2.26 percent during the period Freddie surveyed lenders this week based on Treasury Department data. The 10-year Treasury yield closed Thursday at 2.25 percent.
Nearly two-thirds of panelists surveyed by Bankrate.com for the week Dec. 4 to Dec. 10 agreed with the Mortgage Daily forecast and predicted mortgage rates won’t move more than 2 BPS over the next week. More than a quarter, however, forecasted a decline, and 9 percent expected an increase.
The jumbo-conforming spread widened to 15 BPS in the U.S. Mortgage Market Index report from LoanSifter/Optimal Blue and Mortgage Daily for the week ended Nov. 28 from 7 BPS in the previous report.
Fifteen-year fixed rates averaged 3.10 percent in Freddie’s report, 7 BPS better than in the week ended Nov. 26. The spread between 15- and 30-year fixed rates narrowed to 79 BPS from 80 BPS a week earlier.
Freddie said that five-year, Treasury-indexed, hybrid, adjustable-rate mortgages averaged 2.94 percent, off 7 BPS from one week prior.
One-year Treasury-indexed ARMs averaged 2.41 percent, 3 BPS better than in the previous survey. One-year ARMs averaged 2.59 percent in the week ended Dec. 5, 2013.
One-year ARMs adjust according to movement in the one-year Treasury yield, which was 0.14 percent Thursday, the same as seven days earlier, according to the Treasury Department.
There was no change from last week with the six-month London Interbank Offered Rate, which was 0.33 percent as of Wednesday, Bankrate.com reported.
ARM share fattened to 11.4 percent in the latest Mortgage Market Index report from 11.1 percent in the week ended Nov. 21.
