The average rate for a 30-year fixed-rate mortgage decreased slightly by two basis points to 3.32% from the previous week in Freddie Mac’s survey on the heels of forecasts and federal policy indicators that suggest rates near or at record lows will be sustained into next year.
The average rate for a 15-year FRM slipped one basis point to 2.66%, the average rate for a five-year, Treasury-indexed hybrid rose one basis point to 2.7% and the average rate for a one-year Treasury-indexed adjustable-rate mortgage slipped two basis points to 2.53%.
During the week ending Dec. 13, average points were 0.7 of a point for 30-year FRMs, 0.6 of a point for 15-year FRMs and five-year Treasury hybrids, and 0.5 of a point for one-year Treasury ARMs. A year ago weekly rate averages were as follows: 3.94% for 30-year FRMs, 3.21% for 15-year FRMs, 2.86% for five-year Treasury hybrids and 2.81% for one-year Treasury ARMs.
Thirty-year FRMs are the dominant loan type and likely to continue to be, Freddie Mac chief economist Frank Nothaft said in an interview about his economic forecast released earlier this week.
“As has been true for a long time now, it’s predominantly a fixed-rate market. Consumers are pretty savvy when they see fixed-rate mortgage rates at such extraordinarily [low rates that they can lock in for 30 years]. It’s the…dominant product in the market…and that will continue to be the case in 2013 as well.”
Paul Anastos, president at Mortgage Master, told this publication that there was a steady influx of origination volume through the beginning of this week in response to the continuing low rates followed by a slight slowdown he attributes to the coming holiday.
“Typically around the holidays everybody quiets down a bit,” he said, noting that “the last two days have been slower.”
Anastos, referencing statements by Federal Reserve chairman Ben Bernanke, said he believes rates will remain relatively low until numbers register “healthy increases in employment” and agrees by-and-large with longer-term forecasts of a limited amount of refi burnout from sustained low rates into 2013.
“I would anticipate a little less volume because so many people have already refinanced,” he said, but said on the other hand refinancing interest has remained remarkably steady. He added that, in the Northeast metropolitan markets his company focuses on, purchases have been particularly strong, to the point where he foresees continuing hiring by his company into next year. He said the company is hiring even in harder-hit markets where origination volume may not be as strong as operations staff are needed in some of these.