Following yesterday’s rally in the bond market, mortgage rates continued moving lower on Friday. Weaker-than-expected domestic economic data and stabilization of European government bonds were the main driver behind the decrease in mortgage rates today. Still, it looks uncertain, whether the last two days of improvements are signaling a bit of consolidation for mortgage rates, or it’s just a temporary break and they will eventually grind higher. As pricing on mortgage bonds improved today, a number of lenders repriced their rate sheets with lower mortgage rates compared to those sheets they released earlier this week. And those lenders, who haven’t passed along all the gains yet, may revisit their sheets on Monday morning, so borrowers could benefit if they act quickly.
On Friday, the yield on the benchmark 10-year treasury note fell to 2.15% from yesterday’s 2.24%. European government bonds have stabilized as well, helping a change in market sentiment. Looking at today’s domestic economic data, we received some disappointing reports, with all of them weaker than anticipated, showing no signs of a rebound.
Weakness in the manufacturing sector persisted in May, as the Empire State Manufacturing Index ticked up to 3.1 from April’s -1.2, the New York Fed reported on Friday. This is a disappointing reading, which missed the consensus expectation of 5.
On the other hand, U.S. industrial production production declined a seasonally adjusted 0.3% in April, suggesting a weak global demand. Economists had forecast a reading of no growth. This is the fifth straight month that U.S. industrical output is on a downward trajectory. Capacity utilization was down as well in April, coming in at 78.2%, showing a 0.2% decrease compared to March’s data. This figure is also worse than the expectation of a 0.2% increase.
Consumer sentiment fell in May to a seven-month low, according to a survey released on Friday. The preliminary reading from the University of Michigan showed, that the index on consumer sentiment dropped to 88.6 in May, a sharp decline compared to April’s final reading of 95.9. The consensus expectation was for a reading of 96.
All these economic reports showing weakness, which don’t support the Fed’s plans for a rate hike. The organization said before, that they are determinted to hike rates this year, but the exact timing depends on what the incoming economic data shows. Yesterday, former Fed Vice Chairman Donald Kohn said in a note to Potomac Research clients that the possibility of a June rate hike is now off the table, and an increase in short-term interest between September and December is more likely at this point.
Back on Thursday, Freddie Mac released its weekly national mortgage survey, which saw the average rate on the 30-year fixed mortgage edging up to 3.80% this week from 3.85% in the previous week. The current figure is now very close to this year’s highest one (3.86%), recorded back in March. According to the survey, the 15-year fixed mortgage averaged a rate of 3.07%, translating to 5 basis points increase compared to the prior week’s data. This marks the third consecutive week that mortgage interest rates are on an upward path.
With regards to current mortgage rates, it may look like that the upward trend, that we have seen earlier this week, is shifting, but this can evaporate quickly. Nevertheless, the latest reports about the economy are rather disappointing, so there’s a chance that the envionment for mortgage rates remain favourable for now.
Top American lenders updated their loan information for Friday, including Chase (NYSE:JPM), where the 30-year fixed home loan currently hovers at a rate of 3.750%. The 15-year fixed home purchase loan is up for grabs at 3.125%. Heading over to the lender’s refinance loan options, the standard 30-year refi mortgage can be had for as low as 4.000%. Those favoring the shorter-term, 15-year FRM, will see it coming out at 3.250% interest cost this Friday.
At California-based major lender, Wells Fargo (NYSE:WFC), the 30-year conventional home loan is available today at a rate of 4.000%, a decrease of 0.125% compared to yesterday’s data. The 15-year FRM can be obtained at a lower rate as well, in the form of 3.250%. In case of home refinancing options, the bank offers the 30-year fixed mortgage at a rate of 4.125%. Borrowers, who prefer to take on the 15-year home refinance loan, will encounter a lower interest rate today (3.250%).
Under Citi Mortgage’s (NYSE:C) mortgage loan program, the 30-year fixed home loan is now advertised at a rate of 3.625%. The 15-year version of the lender’s home loan remained steady at 3.000%, according to our observations. As far as refinancing options are concerned, Citi Mortgage’s 30-year FRM starts at a rate of 3.875% this Friday, while the popular 15-year fixed counterpart can be locked in for as low as 3.250%.
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.