30-Year Fixed Mortgage Rate Hits Highest Level in Three Months, Zillow Data Reveals

30-Year Fixed Mortgage RateAfter mortgage rates had trended downwards for the first month of 2015, February has seen rates go up again in the Zillow Mortgages weekly report. This week, interest rates had actually gone up to their highest level in 13 weeks, as 30-year FRMs added nine basis points, moving from 3.67 percent to 3.76 percent. 15-year FRMs were at 2.96 percent, while 5/1 adjustable-rate mortgages ended the week at 3.05 percent in the Zillow report.

There interest rate on 30-year fixed mortgage loans had appreciated considerably in this week’s Tuesday-to-Monday wraparound, hitting 3.85 percent on Tuesday but moving down to about 3.76 percent for most of the week. Zillow vice president of mortgages Erin Lantz chalked that up to concerns that Greece may not be bailed out of its debts and may have to exit the Eurozone. “Rates increased last week as fears of a Greek exit from the Eurozone eased,” she said, adding that the coming week may see little change to mortgage rates. “This week, markets will focus on Fed Chair Janet Yellen’s Congressional testimony and whether Greece’s new fiscal pact proves durable. Rates could be volatile, but net out flat for the week.”

Many believe that the language used by Yellen at this week’s Congressional hearing could influence rates to go down, or at the very least remain flat, as it still does not look likely that the U.S. Federal Reserve would push to increase short-term interest rates sooner than anticipated.

For this week’s Mortgage Bankers Association Weekly Application Index, Zillow predicted that purchase loan activity with seasonal adjustment would not change at all this week. The MBA’s mortgage loan applications report for the week ended February 20, 2015 revealed that purchase applications with seasonality improved by 5 percent, which is quite close to Zillow’s rather neutral prediction; combined purchase and refinance applications, however, fell by 3.5 percent with seasonality. Zillow bases its forecasted purchase index data on loan applications made on the Zillow Mortgages website, with the previous week’s MBA Weekly Application Index data.

Mortgage rates on 30-year fixed-rate loan products were up in all major states covered by Zillow’s report, but the rate hikes were especially egregious in New York, Washington, Texas, Colorado, and Illinois. The biggest increase took place in New York, where 30-year FRMs zoomed up from 3.66 percent to 3.82 percent, followed by Washington state, where rates were up 13 basis points from 3.66 percent to 3.79 percent. 30-year FRMs increased by 11 basis points in Colorado and Texas, moving from 3.66 percent to 3.77 percent in both states. 30-year fixed loan rates in Illinois added ten basis points from 3.65 percent to 3.75 percent.

In contrast, interest rates on 30-year fixed-rate mortgages were up by “only” six basis points in Florida (3.70 percent to 3.76 percent) and seven basis points in California (3.67 percent to 3.74 percent) and Pennsylvania (3.66 percent to 3.73 percent). 30-year FRMs advanced by eight hundredths of a percentage point in New Jersey from 3.70 percent to 3.78 percent, and by nine basis points in Massachusetts, from 3.66 percent to 3.75 percent.