Fixed interest rates on home loans turned modestly higher this week. But the latest market data suggests an improvement could be in the offing.
At 3.93 percent in Freddie Mac’s Primary Mortgage Market Survey for the week ended Dec. 11, thirty-year fixed-rate mortgages averaged 4 basis point more than a week earlier.
But fixed mortgage rates have improved on a year-over-year basis, with the 30 year tumbling 49 BPS compared to the same week in 2013.
“The rate rise comes on the heels of an uplifting jobs report showing nonfarm payrolls adding 321,000 new jobs in November — 91,000 more jobs than expected,” Freddie Mac Chief Economist Frank Nothaft explained in a statement. “The unemployment rate remained unchanged at 5.8 percent.”
Fixed rates could tumble around 6 BPS in Freddie’s next report based on Treasury market activity.
During the days mortgage lenders were surveyed by Freddie, the 10-year Treasury yield — a benchmark for fixed mortgage rates — averaged 2.22 percent based on Treasury Department data.. The 10-year yield closed Thursday at 2.16 percent.
A plurality of panelists surveyed by Bankrate.com for the week Dec. 11 to Dec. 17 disagreed with Mortgage Daily’s forecast and predicted rates will increase at least 3 BPS over the next week. Another 36 percent expected no change, and just 18 percent projected a decline.
In the U.S. Mortgage Market Index report from LoanSifter/Optimal Blue and Mortgage Daily for the week ended Dec. 5, jumbo interest rates were 6Â BPS worse than conforming rates. The jumbo-conforming spread sank from 15 BPS a week earlier.
Freddie’s survey indicated that 15-year fixed rates averaged 3.20 percent this week, surging 10 BPS from the week ended Dec. 4. The spread between 15- and 30-year mortgages plummeted to 73 BPS from 79 BPS in the previous report.
A 4-basis-point increase left five-year, Treasury-indexed, hybrid, adjustable-rate mortgages averaging 2.98 percent in Freddie’s report.
But one-year Treasury-indexed ARMs fell a basis point over the past seven days to 2.40 percent, according to Freddie. The one year averaged 2.51 percent in the week ended Dec. 12, 2013.
The index for the one-year ARM, the one-year Treasury yield, soared to 0.20 percent Thursday from just 0.14 percent in the last report, the Treasury Department reported.
The six-month London Interbank Offered Rate, an index utilized on some subprime ARMs, was 0.34 percent Wednesday, Bankrate.com reported. LIBORÂ inched up from 0.33 percent in the prior report.
ARM share fell to 11.1 percent in the latest Mortgage Market Index report from 11.4 percent in the previous report.
