And alas! Just when all heads are turned up for a mortgage rate rise, survey data comes out to surprise. In the most recent Primary Mortgage Market Survey by Freddie Mac, the 30-year fixed-rate fell by two basis points to a new low.
The report, conducted before the bond market sell-off on Tuesday:
The 30-year FRM rate concluded with an average of 3.88 percent for the week ending June 29, 2017 which is a decrease from last year’s 3.90 percent. During this time a year ago, the 30-year FRM rate concluded at 3.48 percent.
The 15-year FRM rate sustained the previous week’s average at 3.17 percent. Back at the same time in 2016, the 15-year FRM average was at 2.78 percent.
Meanwhile, a slight raise was seen for the 5-year Treasury-indexed hybrid adjustable-rate mortgage which finished with an average of 3.17 percent compared to 3.14 percent the week prior. During the same time the previous year, the 5-year ARM averaged at 2.70 percent.
Rates continue to defy predictions, now at another year-low record, despite the current Fed meeting. Since December of last year, the Fed has raised its key rate by a quarter of a point thrice. Yet, mortgage rates remained relatively steady, even posing for new low records every now and then.
Will this rate situation encourage Americans to purchase or refinance? The latest NAR report on pending home sales is saying otherwise, showing a decline in new home contracts for three months in a row. The shortage in available housing is still pointed out as the main culprit. Fewer inventory push home values up, pricing out many homebuyers and offering fewer options for their range.
The Primary Mortgage Market Survey® was established in April 1971 as the foremost source of mortgage trends in the regional and national level. Its data is utilized by both the public and the mortgage industry at large to gauge market conditions and evaluate mortgage loan options.
The survey results are gathered based on lenders’ most popular mortgage products – inclusive of 30 and 15-year FRMs as well as adjustable-rate mortgages. The first-lien prime conventional conforming home purchase mortgages (with an LTV of 80 percent) are considered primary basis for the survey. Meanwhile, the U.S. Treasury yields are used to index ARMs. Lenders are asked to provide the a) initial coupon rate and points, as well as b) ARM margins for this purpose.