Mortgage rates have increased for the second straight day this week, as mortgage-backed securities (MBS), which most directly influence rate movements, sold off in early trading and then recovered some of the losses. Although, the majority of domestic economic data, that has seen the light of day in the past couple of weeks, has been mixed – which, overall, should have been supportive for the U.S. bond markets – we are observing an upward pressure on rates. As it stands, current mortgage rates are higher by 30 basis points or more compared to this year’s lowest ones on record. And there are a couple of reasons why interest rates have been heading into higher territories lately.
As we reported on Monday, several factors have impact on domestic mortgage rates besides U.S. economic data, and one of them is the concerns over the European economy. Interest rates fell in Europe throughout 2014, and they haven’t stopped falling even after the European QE was introduced. Presently, it looks like that rates have bottomed out in Europe and this could be bad news for U.S. mortgage rates too, in an indirect way.
Mortgage rates have been volatile in the past couple of weeks and it doesn’t look like this trend will change anytime soon. Looking at today’s domestic economic data, the Labor Department published the Job Openings and Turnover Survey for March earlier this Tuesday, which showed, that the number of job openings declined in March from a 14-year high. According to the latest figures, the number of available jobs in March dropped 2.9 percent to a seasonally adjusted 4.99 million compared to 5.144 million in February. On the other hand, total hiring edged up 1.1 percent to 5.1 million. This marks the highest figure for total hiring since December. More people decided to quit their jobs in March, as this figure rose to 2.78 million from 2.72 million in February.
This is a rather mixed report and we don’t think it will move mortgage rates in any direction. Tomorrow, we will get data on April’s retail sales that could have a bigger effect on rates, especially if it turns out much better or much worse than the consensus expectation.
With regards to rate hike, the Fed previously stated that it will increase short-term interest rates, once it sees more improvement in the job market and is „reasonably confident” that inflation will rise to the U.S. central bank’s 2 percent goal over time. Most analysts, who were polled by Bloomberg last month, shared the opinion that the rate hike will kick off in September. However, other economists believe that the central bank’s tightening may start as early as June.
On Tuesday, San Francisco Fed President John Williams said in New York, that raising short-term interest rates „a bit earlier” could allow the U.S. central bank to increase rates more gradually. Again, this may suggest that a rate hike in June is not entirely out of the question, but we have to wait and see what happens.
In a recent interview with CNBC, the same Fed official stated that the rate hike is on the table at every Fed meeting, but the decision and timing of increasing rates ultimately depend on what the economic data shows. If the second quarter’s key domestic economic reports point to a strong rebound of the U.S. economy, that may speed up things as far as rate hike is concerned. On the other hand, in case the economy shows signs of slowing down in the next few months, that could delay the planned rate increase
Now, taking a look at current mortgage interest rates at major lenders, Bank of America (NYSE:BAC) offers the 30-year fixed home refinance loan at a rate of 4.000%. The bank’s 15-year home refi mortgage is another possible option, which is available today for as low as 3.000%.
As far as BofA’s home purchase loans are concerned the popular 30-year and 15-year fixed mortgages are holding firm today. The 30-year FRM is currently available at a rate of 4.125%, while the 15-year conventional home loan can be had for as low as 3.375% interest.
Turning focus to Chase’s (NYSE:JPM) latest quoted rates, the 30-year FRM for home refinancing is coming out at 3.750%. Mortgage shoppers, who believe the 15-year home refinance loan fits the bill better, can expect to pay 3.000% interest cost.
In case of fixed rate home loans, the loan originator’s 30-year mortgage is offered today at a rate of 3.750%. Others, who consider to take on the 15-year home purchase loan, will see these type of loan plans starting at 3.125%.
At California-based top bank, Wells Fargo (NYSE:WFC), the standard 30-year fixed rate refinance loan starts at 4.250% on Tuesday, according to our observations. The shorter-term, 15-year refinance loan alternative can be locked in at a rate of 3.375%.
Heading over to the lender’s home mortgage portfolio, the long-term 30-year fixed conventional loan is quoted at a rate of 4.125%. Those who can afford to finance their new homes in a shorter-term, may want to take a look at the lender’s 15-year FRM, which can be secured at a rate of 3.375% as of today.
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.