Mortgage rates took a breather in the beginning of the week, ending their five-day losing streak. While the change in interest rates was rather subtle, it’s a welcome change anyway, as rates spent the entire last week in higher territories. U.S. treasury prices edged lower on Monday, as investors and traders have been gearing up for a potential rate hike in mid-March. Current 30-year fixed mortgages are offered at a rate of 4.25% on average, unchanged since Friday, according to the latest market data.
Long-dated treasury bonds, such as 20-year and 30-year notes, were bad performers during Monday’s trading session. The former treasury bond finished the session at a yield of 2.84%, up 1 basis point from a day earlier. The 30-year treasury note closed the trading day at a yield of 3.10%, an uptick of 2 basis points since the beginning of the week. On the other hand, the top-rated 10-year note remained flat at 2.49%. The 10-year treasury bond is one the best indicators when it comes to determining whether mortgage rates rise or fall. As mortgage rates tend to follow the movement of 10-year treasury bonds, you may see only very subtle changes in mortgage interest rates this Tuesday morning versus interest rates on Monday. In other words, the changes are marginal at best.
On Tuesday morning, pricing on mortgage-backed securities (MBS) are in the red. If MBS pricing remains in negative territory at the end of the day, we may see mortgage rates heading higher. Still, we don’t anticipate a big net change in mortgage rates this week, unless the upcoming NFP report, which is due on Friday, disappoints financial markets big time. Between now and Friday’s big jobs report, there’s little economic data that could significantly impact markets and mortgage rates. So unless the upcoming Employment Situation report appears to be very soft, it’s unlikely to see mortgage rates fall much lower. On the other hand, a strong NFP report could solidify the case for a March rate hike. As of Tuesday, traders see an 84.1% chance of a quarter point interest rate hike this month, according to the CME Group’s Fed fund future prices.
On the economic front, U.S. factory orders gained 1.2% in January, after a 1.3% increase a month earlier, the Commerce Department reported on Monday. Economists had projected an advance of 1% for January’s reading. The latest data also revealed, that the increase in factory orders were driven by a jump in demand for aircrafts.
As far as today’s domestic economic headlines are concerned, only one piece of data slated for release, in the form of January’s trade balance report. The U.S. Census Bureau will release the international trade report at 8:30 a.m. ET. According to the latest estimations, the U.S. trade deficit likely increased to $49 billion in January from the previous $44.3 billion.
Mortgage rates are holding steady on Tuesday at the top U.S. lenders. Over at Wells Fargo (NYSE:WFC) the 30-year fixed home refinace loan is up for grabs at a rate of 4.375%. The 15-year version of the lender’s refinance loan package can be secured for as low as 3.625%. Those looking for FHA home loan options, may want to consider the 30-year fixed FHA mortgage at this lender, as it’s coming out at 4.375%. In case of the 30-year fixed VA refinance mortgage, it demands 4.000% interest cost.
Staying with refinance mortgaes, over at PNC Bank (NYSE:PNC) the 30-year FRM is published at a rate of 4.375%, according to the updated loan information. Borrowers, who are interested in obtaining the 15-year fixed counterpart, can expect to pay 3.375% interest cost.
At another top U.S. lender, Bank of America (NYSE:BAC) the 30-year fixed refinance loan plans are starting at a rate of 4.500%. The shorter-term, 15-year conventional refinance loan carries 3.875% interest cost, as of today.
At Quicken Loans, the long-term 30-year home refinance loan, which comes with a fixed interest rate over the term of the mortgage, can be secured at a rate of 4.125%. Currently, the shorter, 15-year fixed home refinance loan comes with a rate of 3.375% at this loan provider.
The above mentioned interest rates are subject to change and are not guaranteed. Click here to search for live mortgage rate quotes at some of the top U.S. lenders.