Mortgage interest rates continued moving higher on Wednesday, setting a new record high for 2015, following two straight days of gains. Although, there were several events today, which should have helped mortgage rates recover, instead rates have swung in the other direction. The bottom line is that the recent weakness, that rates have been experiencing since the beginning of the week, should be taken seriously. While, history says that mortgage rates will catch at least a termporary break at some point in the near future, the current upward trend is an alarming one, to say the least.
Earlier this afternoon, a 10-year Treasury note auction took place, which turned out as one of the strongest in years. Overall, this should have been supportive for the bond market, and consequently for mortgage rates, but it’s not the case today. Pricing on bonds eventually worsened and mortgage interest rates headed higher at a number of lenders after several repricing in the afternoon.
However, the aforementioned strong treasury auction wasn’t the only factor, which should have pushed mortgage rates back to a downward trajectory this mid-week. Another factor which could have supported the recovery of mortgage rates is today’s rather weak domestic economic reports. As expected, yesterday’s mixed Job Openings and Turnover survey hasn’t really had much impact on markets, but what’s surprising, that today’s significantly worse-than-expected economic data wasn’t able to help mortgage rates either.
April’s retail sales data remained flat, falling short of the consensus expectation of a 0.2% gain, the Commerce Department reported on Wednesday. Core retail sales, which excludes automobiles and gas, rose 0.2%, missing expectations of a 0.5% rise. On the other hand, March’s retail sales data was revised up to a 1.1% increase instead of the previously reported 0.9% growth. This is a weak report, which doesn’t support the belief that the economy is on the path of a sharp rebound in the second quarter. Pricing on mortgage-backed securities (MBS) improved after the release of the retail sales report, but quickly declined later on, providing no chance for mortgage rates to recover.
Tomorrow, we will get some new domestic reports including weekly jobless claims and April’s producer price index (PPI). We don’t expect that these reports will have much impact on mortgage rates, unless any of these figures are largely off compared to forecasts. Nevertheless, these figures will provide us some information on the current state of the job market and on price changes from the sellers’ perspective.
As far as the Federal Reserve’s impending rate hike is concerned, there’s not much news on that front. What looks certain at this point, that the Fed is determined to raise short-term interest rate this year, but it’s difficult to predict when the actual rate hike is going to happen. Today’s rather weak sales report may take the possibility of a rate hike in June off the table. The most likely scenario is that the Fed will raise rates in September, according to the majority of economists.
The momentum is not on our side these days and mortgage rates remain volatile. If you are in the market for a new home loan or considering to refinance your existing mortgage, probably it’s better to lock your rate sooner rather than later. The current market sentiment is againt low mortgage rates and the risk of floating, instead of locking, becomes higher every day.
Now, let’s take a look at today’s mortgage rates at some of the nation’s top lenders. At U.S. Bank (NYSE:USB), the standard 30-year fixed conventional home loan is quoted at a rate of 4.125% on Wednesday. The lender’s shorter, 15-year fixed home mortgage is coming out at 3.375%, according to the latest data.
Over at Chase (NYSE:JPM), the 30-year home purchase loan is up for grabs at a rate of 3.875%. Those looking to obtain the 15-year fixed mortgage, will see these type of loan plans currently starting at 3.125%. Switching to Chase’s home refinance loan options, the 30-year FRM has remained steady at 4.000% on Wednesday. Looking at the popular 15-year home refi loan, the current rate stands at 3.250% at this lender.
Wells Fargo (NYSE:WFC) also updated its home loan information for today, and the latest data showed, that the 30-year fixed home loan is now available at 4.125%, while the shorter-term, 15-year FRM is offered for as low as 3.375%. Under the bank’s refinance mortgage portolio, the standard 30-year fixed conventional loan carries 4.250% interest. Borrowers, who prefer to refinance in a shorter-term, may find the lender’s 15-year home refinance loan more attractive, as it starts at 3.375%.
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.