30-Year Mortgage Rate Increases by Double Digits, Zillow Data Shows

Fixed mortgage rates soared in the Zillow Mortgages report for Tuesday, February 10, 2015, with 30-year fixed loan products rising by double digits on the heels of upbeat economic data.

The 30-year fixed-rate mortgage jumped up by ten basis points in last week’s Zillow report, moving from 3.56 percent to 3.66 percent. Rates were moving upward for most of the Wednesday-to-Tuesday wraparound week, hitting a peak of 3.73 percent, but later easing to the current rate. The rate on 15-year fixed mortgage loans increased was well, moving to 2.93 percent and staying below the 3 percent threshold, while 5/1 adjustable-rate mortgages were at an even 3 percent.

30-Year Mortgage Rate

According to Zillow vice president of mortgages Erin Lantz, it was the upbeat nature of recent economic statistics that had driven mortgage rates up for the current week. “Strong U.S. economic data pushed mortgage rates up last week, overcoming any potential headwinds from continued turmoil in Europe that would’ve pushed rates down,” said Lantz in a statement. “We expect rates will move slightly higher this week as international headlines should again dominate market movements in this data-sparse week.”

As Zillow is expecting rates to continue increasing this week week, this brings to fore the possibility of mortgage rate hikes happening a bit sooner than expected. Most analysts and market strategists are expecting that mortgage rates may hit 4.50 percent or higher by year’s end, but the main variable driving this may be the U.S. Federal Reserve’s inevitable interest rate hike, which many believe may happen in the second half of 2015. Still, it was interesting to see rates rise a bit significantly, driven mainly by positive economic news that had neutralized ongoing geopolitical concerns in global markets, especially Europe.

For last week’s Mortgage Bankers Association Weekly Application Index forecasts, Zillow expected the seasonally adjusted purchase loan activity to tick up by 3 percent week-over-week. Zillow derives its forecasts from loan requests made on the Zillow Mortgages website over the past week, as well as the previous week’s data from the MBA Weekly Application Index.

Looking at mortgage rate trends in major states, most of these states experienced double-digit rate increases for 30-year fixed products, though there were three where rates were up by “only” nine basis points – these states were Florida (3.56 percent to 3.65 percent), New Jersey (3.58 percent to 3.67 percent), and New York (3.66 percent to 3.75 percent).

As for the major states that experienced the biggest upticks in 30-year fixed mortgage rates, these included Massachusetts (3.52 percent to 3.67 percent, +15 basis points) and Pennsylvania (3.52 percent to 3.67 percent, +15 basis points). 30-year FRMs also made a big move in Colorado (3.52 percent to 3.64 percent) and Illinois (3.55 percent to 3.67 percent), where rates were up by 12 basis points in both states.

Zillow bases its real-time mortgage rate data on “thousands of custom mortgage quotes submitted daily to anonymous borrowers” on the company’s website, and are indicative of the most recent market changes. These rates, however, are neither market rates or a weekly survey of rates offered by banks and other financial institutions.