Mortgage rates headed lower on Thursday, ending their five-day losing streak. Despite some upbeat economic data, U.S. government bonds bounced back and posted gains during yesterday’s trading session. At the same time, mortgage interest rates improved and lenders sent out rate sheets with improved mortgage pricing. While the most prevalently quoted rate on the 30-year fixed mortgage remains at 4.250%, some of the more agressive loan providers are offering this loan for as low as 4.125%, according to the latest mortgage information.
Treasury bonds strengthened, with the yield on the top-rated 10-year treasury bond closing Thursday’s trading session at 2.45%, down 6 basis points from a day earlier. As mortgage rates tend to trail behind the 10-year note, you may see some improvements in current mortgage rates at your lender. The 30-year treasury bond was also in better shape on Thursday, finishing the trading day at a yield of 3.05%, down 4 basis points compared to data from a day earlier.
On Friday morning, pricing on mortgage-backed securities (MBS) are on the rise, which is a good sign for today’s mortgage rates. If MBS stays in the green, mortgage rates could finish the day on a positive note.
Current mortgage interest rates are lower across the country, according to Virgnia-based housing-finance company, Freddie Mac. The federal agency’s latest weekly Primary Mortgage Market Survey (PMMS) showed, that the average interest rate on the 30-year fixed mortgage fell 2 basis points to 4.15% in the week ended February 16. According to the survey, on average lenders were offering 15-year fixed rate mortgage loans at a rate of 3.35% this week, an improvement of 4 basis points over the previous 3.39% in the prior week. The average rate on the flexible 5-year adjustable rate mortgage declined to 3.18% this week, a 3 basis points slide.
Friday is going to be silent in terms of meaningful economic data or big ticket market moving events, therefore we don’t expect major net changes in mortgage rates. After spending the last 5 days in higher territories, mortgage interest rates finally found some traction on Thursday. While current mortgage rates are at the lowest level compared to the last couple of days, it seems that the chances of moving back to record-low mortgage rates in the nearest future are slim.
The Federal Reserve is expected to increase short-term rates this year, and while the the pace and timing of the hikes are unknown at this point, when it happens, mortgage rates are expected to rise. In the last couple of days several top Fed officials shared their views on future interest rate policy. Most of the these Fed policymakers are expecting gradual rate increases to take place this year and many of them said, that three rate hikes could be appropriate. The head of the U.S. central bank Janet Yellen’s two-days of testimony to Congress earlier this week indicated, that a rate hike in March is a live option.
However, the market is clearly not expecting a monetary tightening at the upcoming Fed meeting next month. Currently, the CME Group’s FedWatch tool, which is used by investors and traders to predict future monetary policy, shows a 17.7% chance for a rate hike in March, down from the previous 22.1% a day earlier.
Mortgage interest rates are holding firm at some of the top U.S. lenders this Friday. The standard 30-year fixed rate home purchase mortgage is currently available at a rate of 4.375% at Wells Fargo (NYSE:WFC). The lender’s shorter-term, 15-year fixed home loan is quoted at a rate of 3.500%, today’s mortgage rate information revealed. Wells Fargo’s home refinance loan portfolio includes the long-term 30-year FRM, which can see balances cleared at a rate of 4.375%. Borrowers, who prefer to refinance over 15 years, will see the lender’s 15-year fixed home refinance mortgage coming out at a rate of 3.625%.
At Chase (NYSE:JPM), the 30-year fixed convetional home loan is currently offered at a rate of 4.125%, according to the latest data. The 15-year version of the loan provider’s fixed mortgage can be locked in for as low as 3.375%. Popular home refinancing options include the 30-year fixed rate mortgage, which is carrying a rate of 4.250%, as of today. The 15-year fixed counterpart is on the books at a rate of 3.375%.