Mortgage rates were on the way down once again in the latest Zillow Mortgages report covering the wraparound Wednesday-to-Tuesday week ended March 17, 2015. The 30-year fixed mortgage rate fell eight basis points from 3.73 percent to 3.65 percent, while the 15-year fixed mortgage rate ended the week at 2.87 percent. As far as the 5/1 adjustable-rate mortgage is concerned, there interest rate dipped to 2.75 percent. The 30-year FRM slipped at the start of the wraparound week, then spent considerable time hovering around the 3.69 percent mark, before dropping to the current rate as of yesterday.
Soft U.S. economic data was the primary variable driving mortgage rates down, according to a statement from Zillow vice president of mortgages Erin Lantz. “Rates fell early last week as the European Central Bank officially launched its bond purchase program, and remained low due to weak U.S. data released later in the week,” she said. “This week we expect rate volatility leading up to Wednesday’s Federal Open Market Committee statement and Fed Chair Janet Yellen’s press conference.”
Today’s Federal Reserve meeting is considered to be one of the most important ones in recent months, as it should deal on the contentious topic of whether the Fed should remove the word “patient” from the language defining its stance on an interest rate hike. If the central bank decides to remove “patient” as many expect, this could mean short-term borrowing rates getting increased by June 2015 at the very earliest. Still, there are many holding out optimism for the Fed to wait until September before raising these benchmark rates.
Further, Zillow also released its forecast for the Mortgage Bankers Association Weekly Application Index yesterday, predicting that the purchase index with seasonal adjustment would decrease today by 3 percent from the previous week.
In terms of mortgage rate movement per individual state, most major states saw 30-year FRMs move down by seven to nine basis points, but in New York state, mortgage rates for 30-year fixed-rate mortgage products were down by only three basis points, slipping from 3.72 percent to 3.69 percent. In Illinois and Pennsylvania, rates were down by nine basis points, ticking down from 3.74 percent to 3.65 percent in the former state, and from 3.72 percent to 3.63 percent in the latter.