Survey Reveals Mixed Direction in Rates

Bond yields and Thursday's weekly rate reports paint a mixed picture for current rates as well as future rate direction. According to the Freddie Mac Primary Mortgage Market Survey for May 14, mixed employment statistics released May 8 had little effect on the average rate for fixed-rate mortgages that dominate the market, boosting it slightly to 4.86% from 4.84% the week before; but the average rate for five-year Treasury-indexed hybrid adjustable-rate mortgages and one-year Treasury ARMs dropped to 4.82% from 4.90% and 4.71% from 4.78%, respectively. Points for all these mortgage types during the week ended May 14 were 0.6. "The economy lost 539,000 jobs, less than the monthly job loss of the past five months, and the unemployment rate rose to 8.9%," said Frank Nothaft, Freddie Mac vice president and chief economist. Bankrate's national survey on May 14 indicated 30-year rates have averaged about 5.21%, down from last week's 5.27%. Credit Suisse's Mortgage Market Focus on May 14 estimated mortgage rates at 4.72%, sharply lower from 4.91% reported on May 8. The primary/secondary market spread has been about 82 basis points "but is expected to remain volatile and could move wider," Credit Suisse researchers said.