Mortgage rates jumped on Friday, following the release of a very solid Non-Farm Payrolls data, which had a significant impact on bond markets. The economy created 280,000 jobs in May, a much better reading compared to the consensus expectation of 220,00 jobs. After the release of the May Non-Farm Payrolls data, bonds sold off, which eventually led to a sharp increase in mortgage rates. The yield on the benchmark 10-year treasury note increased to as high as 2.44%, marking the highest intraday level since October 2014. Pricing on mortgage-backed securities (MBS), which most directly influence interest rates, fell and several major lenders revisited their rate sheets with higher mortgage rates on Friday.
Overall, last week was one of the most depressing weeks for mortgage rates so far this year. Bonds sold off big time almost every day of the week, leading to a sharp upick in mortgage interest rates. If you haven’t locked a rate ahead of the release of Friday’s NFP data, chances that now you will see higher interest rates at your lender. The sharp increase in mortgage rates was mainly driven by economic headlines from Europe and better-than-expected U.S. domestic economic data.
Back on Thursday, mortgage-finance company Freddie Mac released its weekly Primary Mortgage Market Survey (PMMS), which saw the 30-year fixed mortgage averaging 3.87% last week. This is the second consecutive week, that the aforementioned mortgage loan remained firm at 3.87%. Also, this is the highest average rate for the 30-year FRM since the beginning of the year. As the federal angency collects its survey responses from lenders in the first half of the week, it wouldn’t be surprising to see further upticks in average mortgage rates next week, when Freddie Mac releases its upcoming survey.
The stronger-than expected NFP data also bolstered speculation among investors that the Fed may raise short-term interest rates earlier than expected. However, we believe the Fed wants to see a series of positive economic data going forward, before making a decision on the timing of a rate hike. The U.S. central bank repeatedly said, that its on track to hike rates this year, but ultimately the incoming economic data will determine the timing of a lift in short-term interest rates. Currently, the consensus expectation is that the rate hike will kick off in September.
Now, turning focus to the upcoming week’s economic calendar, retail and jobs data will take the spotlight in the week ahead. One of the most influential data of the week is going to be May’s retail sales report, which is set to be released on Thursday. If the upcoming data turns out solid, it could signal that the economiy is gaining traction in the second quarter. The latest retail sales reading from April was quite disappointing, coming in flat, according to the Commerce Department’s figures. Core retail sales, which don’t include automobiles and gas, increased 0.2% in April, missing expectations of 0.5% surge.
Another piece of economic data, which is scheduled for release in the upcoming week, is April’s Job Openings and Labor Turnover Survey, or JOLTS for short.March’s reading was showing a 2.9% decline in job openings to a seasonally adjusted 4.99 million, compared to 5.144 million in February.
Besides the above mentioned reports, this week’s economic calendar also includes new data on producer price index and consumer sentiment. All of the above mentioned domestic reports can impact markets in one way or another and indirectly mortgage rates as well.
With regards to current mortgage interest rates, a number of lenders revised their rate sheets with higher rates throughout last week, following a massive weakness in the bond market. At Bank of America (NYSE:BAC), the 30-year fixed home mortgage is currently available at a rate of 4.000%. The 15-year fixed alternative is offered at a rate of 3.125%. Switching to BofA’s refinance loan program, the standard 30-year FRM demands 4.125% interest cost. The shorter-term, 15-year home refinance loan can be obtained at a rate of 3.250%, according to the latest data.
Those looking for home refinancing alternatives, may want to check out the current options at Quicken Loans, as the 30-year fixed conventional mortgage plans are starting at a rate of 4.05%. The lender’s 15-year fixed home refinance mortgage is coming out at a rate of 3.25%.
Heading over to Chase (NYSE:JPM), the long-term, 30-year fixed home purchase loan is now advertised at a rate of 4.000%. Those looking to secure the 15-year FRM, can expect to pay 3.375% interest cost. In case of mortgage refinancing options, the 30-year home refi mortgage can see balances cleared at 4.000% at this financial institution. On the other hand, the popular 15-year refinance loan is published at a rate of 3.375%, the updated mortgage information revealed.
The above mentioned interest rates are subject to change and are not guaranteed. In order to search for live mortgage rate quotes from some of the top U.S. lenders, please click on the link below. To calculate your monthly mortgage payment, feel free to use our featured mortgage calculator.