Mortgage rates moved lower during the week ended Nov. 30, with the average rate for a 30-year fixed-rate mortgage (FRM) falling to 3.9%, down from 3.92% the previous week, according to Freddie Mac’s Primary Mortgage Market Survey.
A year ago at this time, the 30-year FRM averaged 4.08%.
The average rate for a 15-year FRM was 3.3%, down from 3.32%. A year ago at this time, the 15-year FRM averaged 3.34%.
The average rate for a five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) was 3.32%. A year ago at this time, the five-year ARM averaged 3.15%.
In a statement, Len Kiefer, deputy chief economist for Freddie Mac, says although the rate for a 30-year fell two basis points to 3.9 percent, “we closed our survey prior to a surge in long-term interest rates, following an upward revision to third-quarter U.S. Real GDP growth and comments by Federal Reserve Chair Yellen touting a broad-based economic expansion.
“The market implied probability of a Fed rate hike in December neared 100 percent, helping to drive short-term interest rates higher,” Kiefer adds. “The 5/1 hybrid ARM, which is more sensitive to short-term rates than the 30-year fixed mortgage, increased 10 basis points to 3.32 percent in this week’s survey. The spread between the 30-year fixed mortgage and 5/1 hybrid ARM is just 58 basis points this week, the lowest spread since November of 2012.”
This means we can probably expect fixed mortgage rates to move upward by the end of next week.