The 30-year fixed mortgage rate declined slightly in the latest Zillow Mortgages ticker covering the week ended March 3, 2015, as recent comments from Federal Reserve Chair Janet L. Yellen were the main factor influencing this week’s mortgage rate gyrations.
According to Zillow’s latest records, 30-year FRMs dropped from 3.76 percent to 3.70 percent as of Tuesday, marking the first decline after a few consecutive rate increases on the weekly ticker. 30-year fixed mortgage rates had dropped early in the wraparound week, and were playing around in the 3.66 mark before increasing to the present level yesterday. 15-year fixed-rate mortgages remained below the 3 percent mark, closing the week at 2.88 percent, while 5/1 adjustable-rate mortgages were at 2.85 percent.
“Rates dropped dramatically early last week after Fed Chair Janet Yellen suggested it was unlikely the Fed would raise rates before June,” said Zillow Mortgages vice president Erin Lantz, explaining the factors that had affected mortgage rate changes. “This week we expect rates to remain fairly steady, unless Friday’s jobs report comes in stronger than expected.” Currently, most experts still expect the Fed to increase benchmark rates by June, with a few still looking at September as the most likely timing for a rate hike; some had previously expected a rate hike to take place before June, but few are doing so following recent events and statements.
On the other hand, Friday’s employment report is said to be the economic report investors are looking forward to most this month, but for the mortgage space, the tenor of the February 2015 jobs report could have major ramifications on interest rate changes. The January 2015 jobs report showed the U.S. unemployment rate still at 5.7 percent, but also showed that the economy created more jobs than expected; the positive nature of these figures had driven a recent spate of mortgage rate increases, not only on Zillow’s weekly ticker, but on other similar surveys and reports.
Looking at activity in major mortgage markets, Colorado experienced the biggest drop in 30-year fixed mortgage rates, as per Zillow’s most recent update. 30-year FRMs in Colorado were down 12 basis points from 3.77 percent to 3.65 percent, while two other states experienced double-digit declines in interest rates for these products.
In New York, 30-year FRMs slid from 3.82 percent to 3.71 percent, a decline of 11 basis points, while 30-year FRMs took a ten basis point hit in Washington, falling from 3.79 percent to 3.69 percent. Texas also saw a notable drop in 30-year FRMs, as rates dipped eight hundredths of a percentage point from 3.77 percent to 3.69 percent.
Conversely, there were also a few states where 30-year fixed mortgage rates only fell by a handful of basis points, but none among major markets where there was a rate increase for such products. 30-year FRMs in California were down by just two basis points from 3.74 percent to 3.72 percent, while 30-year FRMs in New Jersey (3.78 percent to 3.74 percent) and Pennsylvania (3.73 percent to 3.69 percent) were both down by four basis points.