Mortgage rates fell for the third straight day on Wednesday, as the top-rated 10-year treasury yield hit a three-week low. U.S. government bonds rallied yesterday, as investors retreated from riskier assets, and instead flocked into safe-haven instruments. With that said, the most prevalently quoted rate on 30-year fixed mortgages remains at 4.125% in the best scenarios. While, there’s no telling how long the current run of lower rates will continue, risk-averse borrowers should consider taking advantage of current mortgage rates, if they are looking to purchase a new home or refinance an existing mortgage.
In the secondary market, the yield on the benchmark 10-year treasury bond closed Wednesday’s trading session at a three-week low. The 10-year government bond yield dropped to 2.34%, the lowest yield on this type of treasury bond since January 17. Mortgage interest rates typically follow in the footsteps of the 10-year note, which means that current mortgage rates are lower than those from a day earlier. On the other hand, the yield on the long-term 30-year treasury bond fell below 3% on Wednesday, finishing the trading day at 2.96%, which marks a 6 basis points improvement compared to the yield on Tuesday.
Pricing on mortgage-backed securities (MBS) started this Thursday morning in the red, following the release of a better-than-expected jobless claims report (more on that later). This is a positive economic report, which hurts today’s mortgage rates. While it’s too early to say where mortgage rates are heading today, the initial impression is that this might be the day when the recent winning streak for rates ends.
Current mortgage interest rates are lower across the board, according to government-sponsored agency, Freddie Mac’s latest weekly Primary Mortgage Market Survey (PMMS) released Thursday. The mortgage-finance company’s latest survey showed, that on average lenders were offering standard 30-year fixed mortgages at rate of 4.17% nationwide in the week ended February 9. The current rate on the 30-year FRM is 2 basis points lower compared to data in the prior week. The average lender was quoting 15-year fixed mortgage loans at a rate of 3.39% this week, a decline of 2 basis points compared to last week’s data. Moreover, the average rate on the flexible 5-year ARM dropped 2 basis points to 3.21% this week, the federal agency’s survey revealed.
One piece of domestic economic report saw the light this Thursday, and it appears it’s a strong one. The Labor Department released a fresh jobless claims data earlier today, which showed that the number of Americans filing for unemployment benefits fell to near a 43-year low in the past week. Initial claims for unemployment benfits dropped by 12,000 to a seasonally adjusted 234,000 in the week ended February 4. The consensus expectation was for a reading of 250,000 jobless claims. This marks the 101st straight week that the number of applications for unemployment benefits remained below the 300,000 threshold, a number which is associated by many analysts with a healthy labor market.
Some Fedspeak is on schedule this Thursday, as St. Louis Fed chief James Bullard and Chicago Fed President Charles Evans will make public appearances and share their views on monetary policy. While the market doesn’t expect a rate hike to take place at the upcoming Fed meeting in March, one Fed official, Patrick Harker said earlier this week that a 25 basis point interest rate increase at next month’s meeting is a live option. With that in mind, it will be interesting to hear what today’s Fedspeak will bring to the table.
Refinance rates are looking firm this Thursday morning at some of the top U.S. lenders. One of the biggest mortgage loan providers in the country, Wells Fargo (NYSE:WFC) offers the 30-year fixed loan for home refinancing at a rate of 4.375%. The FHA-backed version of the 30-year fixed refi mortgage is coming out at a rate of 4.250%, according to the latest mortgage information. Borrowers, who prefer to refinance an existing loan over 15 years, will see this type of fixed loan carrying a rate of 3.625% at this lender.
At Bank of America (NYSE:BAC), the lender’s home refinancing options include the standard 30-year FRM, which starts at a rate of 4.375%. Mortgage shoppers who believe the 15-year fixed home refi loan fits the bill better can expect to pay 3.500% interest. Others, who are looking for more flexible loan options, may want to take a look at the 7/1 ARM, which is available today at a rate of 3.375%. The 5/1 adjustable rate mortgage, on the other hand, can see balances cleared at a rate of 3.000%.
The above mentioned interest rates are subject to change and are not guaranteed. Click here to search for live mortgage rate quotes at some of the top U.S. lenders.