After starting the week on a high note, U.S. mortgage rates plunged on Wednesday. This month is generally depressing for mortgage rates, as the average interest rate on 30-year fixed mortgages increased by some 20 basis points as per mortgage buyer Freddie Mac’s weekly mortgage survey. No significant economic data saw the light of day on Wednesday, but the ongoing events in Europe have made an impact on current mortgage rates.
According to comments from Greek officials, there’s a possibility that a deal will be reached with international creditors in order to avoid a default on payment. Following this news, demand for government bonds decreased and yields spiked modestly. The yield on the benchmark 10-year treasury note finished at 2.156%, moving up from yesterday’s 2.135%.
As far as the rest of the week’s economic reports are concerned, tomorrow the Labor Department will release the latest weekly jobless claims report, which will give us some clues on the current state of the labor market. For the upcoming initial jobless claims figure analysts are expecting a reading between 265,000 and 275,000. The Fed is closely monitoring the job market’s improvements, particularly wage inflation, besides other data from the housing market and the manufacturing sector in order to determine when to raise short-term interest rates.
The second estimate for Q1 GDP will complete this week’s economic calendar on Friday. Economists expect that the revised estimate of the first quarter GDP will signal contraction. The first estimate was showing 0.2% growth.
With regards to the Fed’s impending rate hike, there’s not much news on that front these days. Federal Reserve Chairman Stanley Fischer said on Tuesday, that markets shouldn’t be surprised by the timing or pace of a rate hike. Previously, the Fed repeatedly said that the timing of rate hike depends on the incoming economic data. Over the last few weeks, the majority of domestic economic data proved to be soft, which generally ruled out the possibility of a raise in short-term interest rates in June. According to economists, currently the most likely scenario is that the Fed will lift rates in September. Last week, Fed Chair Janet Yellen reiterated in a speech at the Providence Chamber of Commerce in Rhode Island, that the U.S. central bank is on track to raise rates this year.
The Mortgage Bankers Association (MBA) released its weekly mortgage applications report earlier this Wednesday, which showed that loan applications volume declined 1.6% in the week ended May 22, 2015. The number of applications for home refinancing ticked down 4%, while loan requests for home purchases were up 1% from one week earlier, the MBA’s data revealed. The refinance share of total mortgage activity slipped to 51% from the previous 52%.
Turning focus to national mortgage interest rates, mortgage-buyer Freddie Mac’s latest survey showed that the average interest rate on 30-year fixed mortgages inched down to 3.84% compared to 3.85% in the prior week. The rate on the 15-year fixed loan improved as well, edging down by 2 basis points to 3.05%, the federal agecy reported last week.
Mortgage interest rates at major U.S. lenders are looking firm this mid-week. For instance, at Chase (NYSE:JPM), the 30-year home purchase loan is published at a rate of 3.750%, as of Wednesday. The shorter-term 15-year FRM demands 3.125% interest cost. The bank also provides loans for home refinancing purposes, including the long-term, 30-year fixed conventional loan. This type of home refinance loan can be locked in for as low as 4.000%.Those preferring to refinance over 15 years, will see this type of home refinance mortgage coming out at 3.250%.
Wells Fargo (NYSE:WFC) is another top mortgage loan provider, which offers a number of loan options to its clients. Currently, the standard 30-year fixed mortgage loan for home purchase, is up for grabs at a rate of 4.000%. The 15-year home purchase mortgage is available today at a rate of 3.375%. Under its home refinance loan portfolio, the California-headquartered lender offers the 30-year FRM at a rate of 4.125% this mid-week. The shorter, but equally popular 15-year fixed counterpart carries a rate of 3.375%, according to the latest data.
Over at Capital One (NYSE:COF), the 30-year fixed home loan plans are starting at 3.625%. With regards to the shorter-term fixed home purchase mortgage, the 15-year FRM can be obtained for as low as 3.125%, according to the updated loan information.
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