Mortgage rates in most leading market surveys and similar tickets are now closer than they ever were to their levels prior to the “summer spike” of 2013, and according to Zillow, 30-year FRMs finished the wraparound week on Tuesday at 3.58 percent, a decrease of 14 basis points from the final week of 2014. 30-year FRM rates had actually gone as high as 4.03 percent on Friday, before dropping to their present level as of Tuesday. 15-year FRMs were also at some of their lowest level in over a year and a half, closing the week at 2.88 percent, while 5/1 adjustable-rate mortgages finished the week at 2.71 percent.
Zillow Expects Interest Rates To Remain Flat This Week
In her weekly statement, Zillow vice president of mortgages Erin Lantz attributed the volatile activity in the recently concluded week to international economic concerns, just like she did when interest rates had also fluctuated wildly in the week prior. “Rates fell dramatically last week primarily due to fears of slowing global growth, weak equity markets, falling oil prices and low market activity over the New Year’s holiday,” said Lantz. “Given the recent history of markets largely overlooking strong U.S. data, we expect rates to remain flat or fall slightly this week on international news.”
Prior to Tuesday’s Zillow Mortgages update, the last time rates had reached those levels was in May 2013, right before speculation of an imminent Federal Reserve tapering of economic stimulus had driven rates upward. The phenomenon, which has been alternately referred to as the “summer spike” or the “taper tantrum,” began to manifest in the late spring of 2013, but rates only skyrocketed in the summer months, with 30-year FRMs breaching the 4.50 percent mark as of September 2013.
Interest rates, however, had eased considerably in 2014, contrary to what most prognosticators had expected. This year, however, financial experts generally expect mortgage interest rates to rise once again, but probably go as high as 4.8 percent or 4.9 percent for 30-year FRMs.
30-Year Fixed Mortgage Rate Drops to 3.56 Percent in Florida
Talking about mortgage rate trends in major U.S. markets, all of the ten “major” states in the Zillow Mortgages report experienced double-digit declines in 30-year FRM rates. The biggest decrease was experienced in Florida and Illinois, where 30-year fixed mortgage rates declined by 17 basis points, from 3.75 percent to 3.58 percent in the former state, and 3.73 percent to 3.56 percent in the latter. 30-year FRMs slipped by 16 basis points in California from 3.74 percent to 3.58 percent, and by 15 basis points in New York from 3.76 percent to 3.61 percent. The least noticeable of these declines was a ten-basis point decline in Massachusetts, where 30-year FRMs slipped from 3.71 percent to 3.61 percent.
Zillow bases its real-time mortgage rate data on what its press releases call “thousands of custom mortgage quotes submitted daily to anonymous borrowers on the Zillow Mortgages site.” These interest rates are based on current market trends, but are not to be confused with marketing rates or a weekly survey.