Mortgage interest rates have started the week at higher levels, but today’s uptick was smaller compared to last Monday’s increase. While Friday’s improvements suggested, that we may see some kind of consolidation in the short-term, interest rates headed in the other direction in the beginning of the week. Following a nice rally toward the end of last week, mortgage bonds sold off during today’s trading session, which resulted in the evaporation of Friday’s gains. Eventually, pricing on mortgage-backed securities (MBS) worsened, which led to higher yields and an increase in mortgage rates.
In case we see a significant amount of volatility in the market throughout the week, that can impact mortgage rates badly. With several weak domestic economic data released during the last few weeks, normally we would anticipate that’s supportive for the bond market and eventually for mortgage rates. However, that wasn’t the case lately, as sell-off in bonds have continued last week, which led to a change in momentum and market sentiment. Now, all that has changed on Thursday and Friday, when mortgage bonds had a nice rally and rates have caught a temporary break. Now, the question is where do we go from here?
As we see it, there’s still a chance that rates will take the path of consolidation in the next couple of days, which means that they would be moving sideways or in other words, increases would be easing. One of the most notable event in this week’s economic calendar, that may have a significant impact on mortgage rates, is the release of the Fed’s minutes from its April 29 meeting on Wednesday. And throughout the week we will also get a series of housing and manufacturing data, that potentially may have influence on interest rate movements.
One piece of housing data saw the light of day earlier this Monday, which is the National Association of Homebuilders Housing Index for May. The latest reading published by the NAHB showed, that confidence among U.S. homebuilders fell by 2 percent to 54 in May, following April’s solid 56 figure. This is the fourth time in five months that confidence is down among homebuilders, a sign that the housing market’s rebound may take a longer time than expected. The consensus expectation was for a reading of 57. Still, any reading above 50 signals that builders hold a favorable view on business and sales conditions. Government debt prices dropped after the release of the housing data. The yield on the benchmark 10-year Treasury note increased to 2.2214%.
Tomorrow, we will get new data on April’s Housing Starts and Building Permits. The majority of economists expect a sharp increase (10%) in housing starts for April, while others believe the pace of growth will be much slower.
In other news, Chicago Fed President Charles Evans said on Monday in Stockholm, that the Fed should refrain from raising short-term interest rates until early 2016. Evans, who is considered as one of the more dovish members of the U.S. central bank, outlined his concerns over low inflation and suggested that interest rates should stay near zero, in order to help inflation rise above the target level.
As a reminder, Freddie Mac’s latest national mortgage survey released last week, showed that the average interest rate on the 30-year FRM jumped to 3.85% from 3.80% in the prior week. This marked the fourth straight week that mortgage rates have been rising and the current average rate on the 30-year fixed mortgage is only 1 basis point lower than the record high rate from 2015, registered back in March. As for the 15-year fixed mortgage, Freddie Mac reported an increase of 5 basis points to 3.07%.
According to our observations, some of the lenders have repriced their sheets with higher rates today, while at others, borrowers may see rates unchanged compared to Friday’s levels. Looking at some of the top lenders’ mortgage information, at Chase (NYSE:JPM) the 30-year fixed home loan is published at a rate of 3.750% as of Monday. The 15-year alternative of this type of conventional home loan is set at 3.125%. Turning focus to Chase’s home refinance loans, the standard 30-year FRM carries 4.000% interest cost, according to the latest data. The popular 15-year fixed rate home refi mortgage starts at 3.250%.
With regards to Quicken Loans’ home refinance loan program, the 30-year FRM can be secured for as low as 3.875%, according to the lender’s published rate information. The shorter-term, 15-year refinance mortgage loan demands 2.99% interest. Those looking to refinance with the help of the 15-year FHA-backed mortgage, can expect to pay 2.875% interest cost.
Moving on to Wells Fargo (NYSE:WFC), the California-heaquartered mortgage lender currently offers the 30-year home purchase loan at a rate of 4.000%. Mortgage shoppers, who believe the 15-year conventional home mortgage fits the bill better, will see these type of loans plans starting at 3.250%. The lender’s refinance loan portfolio includes the 30-year fixed refinance mortgage package, which is up for grabs at 4.125% on Monday. Another possible fixed rate loan option, the 15-year FRM is available today at a rate of 3.375%.
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.