Freddie Mac says mortgage rates are unlikely to fall anytime soon

The mortgage interest rate is Not much changed this weekFreddie Mac said that despite the benchmark 10-year Treasury note rising to its highest level since November last year.

The government-sponsored enterprise continued that interest rates were unlikely to fall significantly.

“The 30-year fixed-rate mortgage rate has not reached 7% since the start of 2024, but it has not fallen below 6.6% either,” Freddie Mac chief economist Sam Khater said in a press release, indicating lower inflation. , we do not expect interest rates to fall significantly in the short term. “

Freddie Mac’s primary mortgage market survey found that the average interest rate on a 30-year fixed-rate mortgage was 6.82% on April 4, up 3 basis points from the previous week. this time last year30-year loans average 6.28%.

The 15-year FRM actually fell 5 basis points to 6.06% from 6.11% the previous week, but was up from 5.64% a year ago.

However, the 10-year Treasury yield peaked at 4.43% on April 3 and closed at 4.20% on March 27. The closing price on April 3 was 4.36%, and fell to 4.34% by 11:30 EST the next morning.

Zillow’s rate tracker is more reflective of the 10-year trend, with rates rising 22 basis points to 6.66% as of late Thursday morning, up from an average of 6.44% the previous week.

“If the Fed keeps short-term interest rates higher, we believe the downside for floating-rate preferreds may be more limited. [stock] Because coupons should remain in the double digits for the most part, and if the Fed cuts rates, we think mortgage-backed securities spreads could tighten, which could help support the fundamental value of the entire capital structure. BTIG analysts commented in a mortgage finance review report on April 2.

MBS spreads are another consideration for lenders when pricing mortgages.

“We still think banks like JPMorgan Chase [Chase] Independent mortgage banks can be undercut on price, although we did not look for depositories to show quarterly production figures, which are consistent with Largest non-bank correspondent lenders such as Pennymac,” Hagen said.

Bond traders turn bearish this week, selling U.S. Treasuries Data on manufacturing and employment A report from Bloomberg pointed out that this shows that the U.S. economy remains strong. When demand for U.S. Treasuries falls, prices fall and yields rise.

More employment data that could impact Treasury yields and mortgage rates is due on Friday, when the Bureau of Labor Statistics’ monthly report is released.

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