Mortgage rates held their ground fairly well on Thursday, despite the fact that government bonds pulled back as investors turned to riskier assets. The decline in the bond market is likely a result of profit-taking or investor portfolio re-positioning. Also, some influential domestic economic data came out on Thursday, which weighed down on bond prices. The good news is that current mortgage rates are in line with those from yesterday. The average lender is quoting the 30-year fixed mortgage rate in the range of 3.75% – 3.875%.
Now, looking at the secondary market, the 10-year treasury yield, which is a bedrock of global finance, increased by 5 basis points to 2.04% during Thursday’s trading. Pricing on mortgage-backed securities (MBS), which tends to move in the same direction as 10-year treasury notes, decreased on Thursday. When pricing on MBS declines, mortgage rates tend to move higher. However yesterday’s net change in mortgage rates wasn’t significant at all, and most of the adjustments can be seen in slightly higher closings closts. As far as the longer-term 30-year treasury bond is concerned, the yield shot up to 2.87% from the previous 2.84% on Wednesday.
Today’s mortgage rates look flat, as there are no signs of price swings in the bond markets this Friday morning. If this trend continues, we could see mortgage interest rates finishing the day close to Thursday’s levels. Current loan pricing remains close to historical lows, which makes home-buying and refinancing attractive for borrowers.
Mortgage-buyer, Freddie Mac’s latest weekly Primary Mortgage Market Survey (PMMS) released on Thursday, showed that fixed mortgage rates headed higher in the week ended October 15. According to the federal agency’s survey, the national average rate on the benchmark 30-year fixed mortgage rose by 6 basis points to 3.82% this week. The same time a year earlier, the 30-year FRM averaged a rate of 3.97%. With regards to the 15-year fixed mortgage, the average interest rate on this type of loan came out at 3.03%, which marks a 4 basis points increase compared to data from a week earlier. This time a year ago, the average rate on the 15-year fixed mortgage averaged 3.18%.
Looking at this week’s national mortgage rates on flexible type of loans, the 5-year treasury-indexed hybrid adjustable-rate mortgage remained unchanged at a rate of 2.88%, Freddie Mac’s latest data revealed. A year ago this type of mortgage loan averaged 2.92%. In case of the 1-year ARM, the averaged interest rate was hovering at 2.54% this week, down by 1 basis point compared to data in the prior week. The same time a year earlier, the 1-year ARM averaged 2.38%.
Following the release of September’s Non-Farm Payrolls report mortgage rates eased, however, the impact of this first-tier domestic economic data hasn’t lasted long, and as U.S. treasury bond prices declined, mortgage interest rates rebounded. And this is why you see higher national mortgage rates in the government-sponsored enterprise’s latest weekly PMMS survey.
However, it’s important to note that Freddie Mac’s survey collects responses from lenders in the early part of each week, therefore it doesn’t take into account those economic headlines and events that happen in the latter part of the week, that could possibly impact mortgage rate movement.
Friday’s economic calendar includes three pieces of data in the form of fresh reports on industrial production, consumer sentiment and job openings. Industrial output decreased 0.2% in September, according to data released by the Federal Reserve earlier this Friday. This is another indication that the U.S. economy slowed in the third quarter. The consensus expectation was for a fall of 0.1%.
On the other hand, the preliminary reading of the University of Michigan’s Consumer Sentiment Index for October jumped to 92.1 from September’s final reading of 87.2. Economists had projected a reading of 89.5 for October’s data.
On Friday, the Labor Department released its latest Job Openings and Labor Turnover Survey (JOLTS) for August, a closely watched indicator of labor conditions, which showed that the number of job openings available in August decreased more than expected, coming in at 5.37 million versus 5.75 million in July. The consensus expectation was for a reading of 5.6 million job vacancies. Still, the current data represents the second-highest job openings figure, following July’s all-time high of 5.75 million job openings.
In order to search for live mortgage rate quotes from some of the top U.S. lenders, please click on the link below.