Mortgage rates headed higher on Tuesday, marking the second straight day, that interest rates were on the rise. The main reason for the uptick is that mortgage-backed securities (MBS) sold off. The increased selling pressure in bond markets causes MBS prices to drop, which leads to higher mortgage rates and this is exactly what happened yesterday. Now, looking at current mortgage rates this Wednesday, it seems that interest rates have stayed firm following two days of increases.
With regards to today’s domestic economic data, the ADP employment report just came in shy of expectations. It appears, that the U.S. private sector added 212,000 jobs in February, a lower figure compared to the expected 220,000 jobs. Meanwhile, January’s private payrolls were revised from the previously reported 213,000 to 250,000. The current weaker-than-expected figure helped bond markets to improve this mid-week. On the other hand, February’s ISM Non-Manufacturing Index came in at 56.9, according to the Institute of Supply Management, a slightly better figure than the 56.7 reading it had back in January. The aforementioned economic data helped offsetting the improvements that bond markets saw earlier today, which eventually led to mortgage rates moving sideways.
On Friday we will get the February Non-Farm Payroll data, which essentially can be a game changer as far as mortgage rates are concerned. If the data appears to be significantly weaker-than-expected, mortgage rates could benefit in the short-term. However, if the report contains some strong figures, then you have to face the possibility of a sharp uptick.
As far as Europe is concerned, tomorrow’s ECB meeting may have an impact on financial markets and ultimately could casue volatility for U.S. mortgage rates, depending on the outcome of the meeting. As we reported earlier, the European Central Bank is expected to unveil details of its bond purchase program tomorrow, however, it’s unlikely that it will introduce any new monetary policy measures, according to analysts. Overall, this is another factor that poses risk for mortgage rates ahead of Friday’s big job report.
As mortgage rates have been on an upward trend in the last four weeks, you may want to consider locking a rate ahead of the two upcoming events we mentioned earlier in this report. Although, it’s difficult to predict which direction rates will be heading to, we believe there is a greater probability that mortgage rates will increase in the short-term, than the possible scenario that they will fall.
Turning attention to current mortgage interest rates at top lenders, Bank of America (NYSE:BAC) is offering the 30-year home purchase loan for as low as 3.750%, according to our observations. The 15-year FRM has been firm for most of the week at 3.000%. In case of home refinancing options, the bank’s 30-year conventional loan is carrying 3.875% interest cost. Borrowers, who are more interested in refinancing over 15 years, may want to consider BofA’s 15-year fixed mortgage option, which comes with a decent rate in the form of 3.000% this mid-week.
Over at Wells Fargo (NYSE:WFC), the 30-year fixed loan for home purchase is quoted at 4.000%. The 15-year fixed mortgage is another possible scenario, and it starts at a rate of 3.500%. The lender’s refinance loan portfolio includes the 30-year FRM, which has an asking rate of 4.125% on Wednesday. The popular 15-year fixed refi loan is now available at a rate of 3.500%.
SunTrust (NYSE:STI) is another established lender, which offers a wide variety of home loans. Currently, the 30-year fixed conventional home loan is quoted at a rate of 3.9% at this bank. The shorter-term, 15-year home mortgage plans are starting at 3.125%, according to today’s loan information.
The above mentioned interest rates are subject to change and are not guaranteed. In order to search for live mortgage rate quotes from some of the top U.S. lenders, please click on the link below. To calculate your monthly mortgage payment, feel free to use our featured mortgage calculator.