This past week saw an increase in fixed rates on residential loans, and it’s unlikely that rates will move significantly lower over the next seven days.
In Freddie Mac’s Primary Mortgage Market Survey for the week that ended on Dec. 31, thirty-year fixed rates averaged 4.01 percent.
A strong consumer confidence report for December helped drive mortgage rates higher, Freddie Mac Chief Economist Sean Becketti said in the report.
Freddie’s regulator and conservator, the Federal Housing Finance Agency, reported that 30-year rates averaged 4.08 percent in November, down four BPS from October.
In Freddie’s next report, fixed rates probably won’t move much, maybe two BPS lower, based on an analysis of Treasury market data by Mortgage Daily.
Mortgage rates are expected to increase at least three BPS over the next week, according to 38 percent of of panelists surveyed by Bankrate.com for the week Dec. 31 to Jan. 6 — the same share that predicted no change. Just 24 percent expected a decline.
In the U.S. Mortgage Market Index report from OpenClose and Mortgage Daily for the week ended Dec. 25, interest rates on jumbo mortgages were 15 BPS less than on conforming loans. The jumbo-conforming spread thinned from a negative 19 BPS one week prior.
On 15-year mortgages, fixed rates averaged 3.24 percent in Freddie’s report, two BPS worse than in the week ended Dec. 24. The difference between 15- and 30-year rates widened to 77 BPS from 74 BPS in the prior report.
At 3.08 percent in Freddie’s survey, five-year, Treasury-indexed, hybrid, adjustable-rate mortgages averaged two BPS more than seven days earlier.
Freddie said that one-year ARMs averaged
2.68 percent, no different than in the last report but up 28 BPS from the week ended Jan. 1, 2015.
The yield on the one-year Treasury note, which determines rates changes on one-year ARMs, was 0.65 percent as of Thursday, a single basis point more than seven days earlier, Treasury Department data indicate.
Some ARMs adjust based on the six-month London Interbank Offered Rate. Bankrate.com reported LIBOR at 0.83 percent as of Wednesday, climbing from 0.81 percent as of seven days earlier.
ARM share was 11.9 percent in the most-recent Mortgage Market Index report, widening from 9.8 percent in the previous report.