Interest rates increased last month and were also higher this week. Short-term and long-term predictions have further rate increases ahead.
At 4.24 percent , average 30-year note rates on mortgages that closed in November were 4 basis points more than they were during the preceding month.
The increase was far more substantial compared to the same 30-day period last year, when 30-year residential loan rates averaged 3.81 percent.
Ellie Mac Inc. reported the rates in its
December 2017 Origination Insight Report.
Rates on just conventional loans were most recently 4.29 percent. On mortgages insured by the Federal Housing Administration, the average was 4.26 percent, while it was just 4.01 percent on loans guaranteed by the Department of Veterans Affairs.
In the seven days that concluded on Dec. 21, thirty-year fixed rates averaged 3.94 percent, according to Freddie Mac’s Primary Mortgage Market Survey. That was a basis point more than the previous week but 36 BPS better than the same seven days in 2016.
“The majority of our survey was completed prior to the surge in long-term interest rates that followed the passage of the tax bill,” Freddie Mac Deputy Chief Economist Len Kiefer said in the report. “If those rate increases stick, we’ll likely see higher mortgage rates in next week’s survey.”
Joe Farr of MBSQuoteline noted in a written statement that based on prices of mortgage-backed securities, mortgage rates have risen another 7 or 8 BPS since Freddie concluded its survey.
Mortgage Daily’s analysis of Treasury market activity suggests fixed mortgage rates could be around 3 BPS higher in Freddie’s next survey.
An increase of at least 3 BPS was also predicted by 72 percent of Bankrate.com panelists for the week Dec. 20 to Dec. 27. No change was expected by 17 percent, and just a percent projected a decrease.
Fannie Mae predicted in its Housing Forecast: December 2017 that 30-year fixed rates will average 3.9 percent this quarter, 4.0 percent in the first-quarter 2018 and 4.1 percent three months later.
Interest rates on jumbo mortgages were
20 BPS higher than conforming rates in the the U.S. Mortgage Market Index report from Mortgage Daily and OpenClose for the week ended Dec. 15. The spread widened 4 BPS from the preceding week.
Freddie reported that 15-year rates were 3.38 percent, 2 BPS higher than in the week ended Dec. 14. Fifteen-year rates were 56 BPS less than 30-year rates, slightly thinner than 57 BPS in the last report.
On five-year, Treasury-indexed, hybrid adjustable-rate mortgages, rates averaged 3.39 percent in Freddie’s survey, up 3 BPS for the week.
Fannie’s forecast has hybrid ARMs averaging 3.2 percent in the fourth quarter, 3.4 percent three months later and 3.5 percent in the second-quarter 2018.
Bankrate.com reported the six-month London Interbank Offered Rate at 1.79 percent as of Wednesday, climbing 4 BPS from seven days prior.
ARM share in last week’s Mortgage Market Index report was 10.0 percent, widening from 9.9 percent a week earlier.
Ellie reported ARM share at 5.6 percent for November, slightly more broad than 5.5 percent the prior month and much wider than 3.9 percent a year prior.
November’s share was 6.2 percent on conventional loans, 0.6 percent on FHA transactions and 0.3 percent on VA mortgages.
