Heading into the Christmas holiday, interest rates on home loans moved higher, and it’s looking like another bump is in store for New Years.
The  Primary Mortgage Market Survey for the week ended Dec. 24 from Freddie Mac had 30-year fixed rates averaging 3.83 percent.
The 30 year rose 3 basis points from the previous week. But 30-year rates have substantially improved from the same week last year, when they averaged 4.48 percent.
“Mortgage rates were up slightly, following a week of mixed economic releases,” Freddie Mac Chief Economist Frank Nothaft said in the report. “Existing home sales were down 6.1 percent in November to annual rate of 4.93 million units, below economists’ expectations. New home sales fell 1.6 percent last month to an annual rate of 438,000, also below expectations. Meanwhile, the third quarter real GDP was revised sharply higher to 5.0 percent according to the final estimate released by the Bureau of Economic Analysis.”
A Mortgage Daily analysis of Treasury market data suggests that fixed mortgage rates might be around 5 BPS worse in Freddie’s next survey.
But a majority of panelist surveyed by Bankrate.com for the week Dec. 24 to Dec. 30 forecasted no changes in mortgage rates during the next week. An increase of at least 3 BPS was predicted by 45 percent, while none expected rates to drop.
Interest rates on jumbo mortgages were 7 BPS worse than conforming rates in the the U.S. Mortgage Market Index report from LoanSifter/Optimal Blue and Mortgage Daily for the week ended Dec. 19. The spread thinned from the prior week’s 8 BPS.
A single basis point increase in Freddie’s survey from the week ended Dec. 18 left 15-year fixed-rates averaging 3.10 percent. Rates on 15-year mortgages were 73 BPS lower than on 30-year loans, widening from the 71-basis-point spread in the previous report.
Freddie reported that five-year, Treasury-indexed, hybrid, adjustable-rate mortgages averaged 3.01 percent in the most-recent report, 6 BPS worse than in the previous report.
One-year Treasury-indexed ARMs averaged 2.39 percent, 1 basis point more than in Freddie previous survey but 17 BPS better than in the week ended Dec. 26, 2013.
One-year ARMs adjust based on the one-year Treasury yield, which closed at 0.26 percent Wednesday, a basis point more than as of the previous Thursday, according to Treasury Department data.
The yield on the six-month London Interbank Offered Rate was 0.35 percent Tuesday, up from 0.34 percent in the prior report.
ARM share fell to 10.9 percent in the latest Mortgage Market Index report from 11.1 percent a week earlier.
