Mortgage rates held mostly flat on Thursday, as the rally in the bond market stalled a day after the Fed’s rate hike announcement. Pricing on mortgage-backed securities (MBS), which most directly influence mortgage rate movement, slightly declined on Thursday. As a result current mortgage rates this Friday morning are similar to those a day earlier, as lenders were cautious adjusting their rate sheets. The most prevalently quoted interest rate on the 30-year fixed conventional mortgage remains at 4.250% in the best scenarios, according to the latest market data.
In recent trading, the benchmark 10-year treasury yield closed at 2.53%, an uptick of 2 basis points over the previous 2.51% from Wednesday. Mortgage rates tend to trail behind the 10-year treasury yield. When the yield on the top-rated 10-year treasury bond drops, mortgage interest rates usually fall as well. On the other hand, if the 10-year treasury yield increases, interest rates are often trending higher. The 30-year treasury bond closed the trading session at a yield of 3.14%, up 3 basis points compared to the yield from the previous day.
MBS pricing is in the green on Friday morning, following the release of some mixed economic reports (more details on that later). If MBS remains in positive territory, today’s mortgage rates could benefit.
Current mortgage rates are higher across the country, Virginia-based mortgage-finance company, Freddie Mac reported on Thursday. The housing giant’s latest weekly Primary Mortgage Market Survey (PMMS) showed, that the average interest rate on the standard 30-year fixed conventional loan jumped 9 basis points to 4.30% in the week ended March 16. On average, mortgage lenders were offering shorter-term 15-year fixed loans at a higher rate as well last week, in the form of 3.50%. This marks an 8 basis points increase over the average rate in the prior week. The 5-year ARM carried an average rate of 3.28% this week, up 5 basis points from the previous 3.23% a week earlier, Freddie Mac reported.
It’s important to note, that Freddie Mac’s survey collects responses from lenders on Monday and Thursday, therefore the results of the survey don’t reflect the changes that happen in the second half of the week. With that said, the figures in the latest PMMS survey don’t reflect the market impact of the Fed rate hike on Wednesday. As we reported yesterday, mortgage rates improved following the U.S. central bank’s decision to hike rates at the March FOMC meeting.
Two pieces of economic data got released today, a fresh data on industrial production and a preliminary reading on February’s consumer sentiment. U.S. industrial output was flat last month, following a revised 0.1% decline in January, official report published by the Federal Reserve showed. Economists had projected 0.2% increase for last month’s industrial production.
Following a pullback in February, consumer sentiment picked up more than expected in March, as Americans were more upbeat about the economy and their finances, according to a preliminary reading from the University of Michigan. The consumer sentiment gauge increased to 97.6 in March from 96.3 in February, exceeding expectations of a 97.0 reading.
Overall, current mortgage interest rates are lower compared to rates from a week earlier. If you are happy with current mortgage pricing, you may want to lock in the recent gains.