Freddie Mac’s weekly average for the 30-year rate came in two basis points higher at 3.9%, while the average for the five-year Treasury-indexed hybrid ARM dropped seven basis points to a new low at 2.78%.
Like the 30-year fixed rate mortgage, the 15-year FRM was up two basis points at 3.13%. The average weekly primary market rate for the one-year ARM was up just a basis point at 2.81%.
Mixed economic indicators in the U.S. and financial developments in Europe continue to drive rate activity. Uncertainties related to these have pushed rate-indicative bond yields more frequently below 2% at various points during the period covered in Freddie’s most recent rate survey, which encompasses the week ending April 19.
The long-term, rate-indicative 10-year Treasury yield as of Thursday afternoon was at 1.96% following a less-than-expected drop in U.S. jobless claims. The Collingwood Group said in a report Thursday that economic indicators in the U.S. are vacillating, in part, due to insufficient job creation, which continues to hold back housing. In turn, constraints on the housing market are restraining job creation, the firm said.
When asked how rates play into this, Collingwood Group partner Tim Rood told this publication, “There is no doubt that affordability is certainly a factor” in consumer decisions that support the housing market, but it tends to be overshadowed by other factors such as employment.
Affordability remains strong from a historic perspective. Rates are still below where they were last year, according to Freddie Mac. A year ago, the 30-year averaged 4.8%, the 15-year averaged 4.02%, the five-year Treasury hybrid averaged 3.61% and the one-year Treasury ARM averaged 3.16%.
Average points in the latest week were highest for 30-year FRMs at 0.8 of a point, followed by 0.7 of a point for 15-year FRMs and five-year Treasury hybrids. One-year Treasury ARMs required borrowers pay an average of 0.6 of a point.
