Higher Treasury yields related to improvements in Europe’s debt situation ultimately translated into another rise in Freddie Mac’s average 30-year mortgage rate for borrowers in the most recent week, bringing it to a level half a percentage point above the record low set in mid-October.
This increase equates to about $50 more in monthly payments for a borrower with a $200,000 conventional loan, Freddie vice president and chief economist Frank Nothaft said in a press release.
For mortgage production professionals, “the largest issue that you have from a hedging perspective…is declining volumes,” Les Parker, president of hedging consultancy Parker & Co., told this publication, when asked about the recent climb in Treasury yields that put upward pressure on rates. “If you start getting fresh apps that you can’t turn then you have a problem,” he said.
The 30-year rate was 4.61% during the week ending Dec. 9, up from 4.46% a week ago but down from 4.81% a year ago. The average rate for a 15-year fixed rate mortgage in the most recent week was 3.96%, up from 3.81% the previous week but down from 4.32% a year ago. Average points for both 30- and 15-year FRMs during the week ending Dec. 9 were 0.7.
Shorter-term adjustable-rate mortgage rates tracked by Freddie also rose during the most recent week. Average points for these loans were relatively lower than for FRM product at 0.6. The average five-year hybrid Treasury-indexed ARM rate was 3.60% during the week ending Dec. 9, up from 3.49% the previous week but down from 4.26% a year ago. The average one-year Treasury ARM rate in the latest week was 3.27%, up from 3.25% the previous week but down from 4.24% a year ago.
