It has been more than two years since long-term interest rates on residential loans have been this high, and some signs point to further escalation.
In the Primary Mortgage Market Survey from Freddie Mac for the week that concluded on Dec.8, 30-year fixed rates averaged 4.13 percent.
That was the highest average for long-term mortgages rates since the week ended Oct. 2, 2014, when Freddie reported the average at 4.19 percent.
Thirty-year fixed rates averaged
4.08 percent in the week ended Dec. 1, 2016, and 3.95 percent in the week ended Dec. 10, 2015.
Freddie
Mac Chief Economist Sean Becketti explained in the report, “As rates continue to climb and the year comes to a close, next week’s FOMC meeting will be the talk of the town with the markets 94 percent certain of a quarter-point-rate hike.”
Joe Farr, MBSQuoteline director, said mortgage rates haven’t changed much since Freddie conducted its survey.
“Subsequent to the survey, an improvement in mortgage rates on Wednesday ahead of the ECB meeting was largely offset on Thursday following the ECB’s disappointing announcement that the size of future stimulus will be smaller than expected,” Farr explained in a written statement.
Mortgage Daily’s analysis of the week’s Treasury market activity indicates that fixed mortgage rates might be around 3 BPS higher in Freddie’s next survey.
But a majority of panelists surveyed by Bankrate.com for the week Dec. 8 to Dec. 14 predicted that mortgage rates won’t change over the next week, while a decline of at least 3 BPS was projected by 45 percent, and none expected an increase.
Jumbo rates were
13 BPS less than conforming rates in the  U.S. Mortgage Market Index report from Mortgage Daily and OpenClose. The jumbo-conforming spread widened from a negative 7 BPS the prior week.
Freddie’s survey had 15-year fixed rates climbing 2 BPS from a week earlier to 3.36 percent.
The spread between 15- and 30-year rates widened to 77 BPS from 74 BPS.
Five-year, Treasury-indexed, hybrid, adjustable-rate mortgages averaged 3.17 percent, also up 2 BPS from the last report.
At 0.84 percent as of Thursday, the yield on the one-year Treasury note was higher than 0.82 percent seven days earlier, according to Treasury Department data.
The six-month London Interbank Offered Rate was 1.29 percent for the week, Bankrate.com reported Wednesday.
LIBOR was no different than a week previous.
ARM share widened to 11.6 percent in the most-recent Mortgage Market Index report from 9.9 percent in the prior report.
