Rates on adjustable-rate and jumbo mortgages that exceed the $417,000 conforming loan limit continue to climb, even as rates on 30-year fixed-rate mortgages hit lows not seen since March.
Bankrate.com’s weekly survey of lenders showed the average conforming 30-year fixed mortgage rate at 6.17 percent, with an average of 0.36 discount and origination points. That’s down from 6.29 percent a week ago. Average rates on 15-year fixed-rate mortgages — often used to refinance — fell by a similar amount, to 5.85 percent with 0.34 points.
The average jumbo 30-year fixed rate continued to move higher, rising 4 basis points from a week ago to 7.24 percent, Bankrate.com reported. Rates on adjustable-rate mortgage (ARM) loans were also higher, with the average one-year ARM rising to 6.08 percent, and the average 5/1 ARM climbing to 6.21 percent with an average of 0.27 points, up from 6.15 percent a week ago.
Bankrate attributed the divergent movement in interest rates to continued nervousness about the economy and rising loan delinquencies. While yields on Treasury securities have fallen, only rates on conforming fixed rate loans followed suit.
Rates are falling on loans that fall within the $417,000 conforming loan limit because they are eligible for purchase or guarantee by Fannie Mae and Freddie Mac. But investors perceive jumbo and ARM loans as riskier, and are demanding higher returns on bonds that are backed by such loans. Yields on those securities have “decoupled” from Treasurys, and borrowers are paying higher rates, Bankrate said.
Mortgage rates on “agency-eligible” conforming loans could continue to fall, with 42 percent of panelists surveyed by Bankrate forecasting further reductions. One-third expected rates to rebound, while the remaining 25 percent said rates will remain unchanged over the next 30 to 45 days.
The following is a sampling of Bankrate.com’s average 30-year-mortgage interest rates this week in some U.S. metropolitan areas:
New York – 6.19 percent with 0.17 point
Los Angeles – 6.23 percent with 0.57 point
Chicago – 6.24 percent with 0.12 point
San Francisco – 6.12 percent with 0.63 point
Philadelphia – 6.2 percent with 0.16 point
Detroit – 6.29 percent with 0.01 point
Boston – 6.23 percent with no points
Houston – 6.01 percent with 0.88 point
Dallas – 6.14 percent with 0.49 point
Washington, D.C. – 6.03 percent with 0.54 point