Mortgage rates were moving sideways on Tuesday ahead of the Federal Reserve’s monetary policy decision on Wednesday. U.S. government bonds pulled back yesterday following a two-day gain, as equities strengthened, while market participants are betting on the Fed to hold off on raising short-term rates until 2016, as the country is facing some global economic headwinds. However, analysts believe the central bank may signal in its October rate statement, that a rate liftoff could still be in the cards this year.
If you are looking to lock a mortgage rate these days, you may see some slight adjustments in closing costs or lender credit at some mortgage loan providers compared to closings costs/lender credit earlier this week. The average loan provider is quoting the 30-year fixed mortgage rate in the range of 3.75% – 3.875%, according to our observations. Low borrowing costs make home buying and refinancing affordable, and with current mortgage rates still hovering at such low levels we haven’t seen since April 2015, this brings yet another golden opportunity for fence-sitters to take advantage of them.
In the secondary market, the 10-year treasury note, which is the bedrock of global finance, finished Tuesday’s trading session at 2.05%, which marks a 2 basis points decrease compared to data from a day earlier. As mortgage rates tend to follow the direction of the benchmark 10-year treasury note, you may see slight improvements in today’s mortgage rates, however, as we mentioned above, at most lenders the changes can be seen in closing costs or lender credit instead of contract rate. In recent trading, the longer-term 30-year treasury yield closed at 2.86%, down 1 basis points compared to the previous 2.87% that it carried before.
Mortgage-backed securities (MBS), which most directly impact mortgage interest rates, are in the red this Wednesday morning. The CME FedWatch tool, which tracks Fed-fund futures, shows the market is pricing in about a 47% chance for a rate hike in December. While it’s widely expected that interest rates will be kept near zero this year, there’s always a risk that the Fed moves this week, which could catch the market flat-footed and it could cause a sharp increase in mortgage rates as well. However, analysts believe it’s more likely that the Fed will give some clear signals to the market before lifting rates for the first time in nearly a decade.
With regards to economic news, there’s no influential domestic economic data scheduled for release today. However, the Fed will publish its monetary policy statement later on this Wednesday, which could easily move markets depending on the outcome of the statement. Tomorrow we will get a few pieces of economic data in the form of weekly jobless claims, fresh report on pending home sales and the first reading of third-quarter GDP.
According to financial company, HSH.com’s Weekly Mortgage Rates Radar, average interest rates on mortgage loans were mixed in the Wednesday-to-Tuesday wraparound week. The company’s survey showed that the average rate on the 30-year fixed mortgage dropped by 1 basis point to 3.85% in the said period. On the other hand, the average rate on the conforming 5/1 adjustable rate mortgage increased by 2 basis points to 2.95%.
Now, moving on to current mortgage rates at major lenders, the 30-year fixed home purchase loan is coming out at a rate of 4.000% at San Francisco-based top loan provider, Wells Fargo (NYSE:WFC), this Wednesday. Borrowers, who are interested in obtaining the 15-year fixed conventional home loan can expect to pay 3.125% interest cost, according to the latest mortgage loan information.
In case of home refinancing options, the lender has plenty of alternatives, including the long-term 30-year FRM, which can be secured for as low as 4.000%. Others, who believe the 15-year FRM could fit the bill better, will see this type of loan available today at a rate of 3.250%.
Switching to current mortgage interest rates at Chase (NYSE:JPM), the benchmark 30-year fixed home purchase mortgage is offered today at a rate of 3.625%, according to the latest data. A shorter-term option, the 15-year conventional home loan, is up for grabs at a rate of 3.000%.
At Chase, the standard 30-year refi mortgage plans are now starting at a rate of 3.875%. Individuals, who believe the popular 15-year fixed home refinance loan is a more suitable option, can expect to pay 3.125% interest cost.
Another top lender, Bank of America (NYSE:BAC) has a bunch of mortgage loan options as well. Currently, the long-term 30-year conventional home loan is hovering at a rate of 3.750%, according to our observations. Those, who are interested to pick up the 15-year FRM, which can be used for home purchase, will see the interest rate clinging at 2.875%.
Under the lender’s home refinance loan portfolio, the 30-year refi mortgage is quoted at a rate of 4.000% as of today. BofA’s 15-year fixed home refinance loan package is carrying 3.000%, the latest data showed.
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.