Record Low Mortgage Rates are History as Fixed Rates Soar 50 Basis Points

Record low mortgage rates are a thing of the past as rates continue to march higher this week. Average 30 year mortgage rates broke above 4.00 percent in a big way and soared an incredible 53 basis points. Mortgage rates today on 30 year conforming loans are averaging 4.51 percent, up from last week’s average rate of 3.98 percent.

Current mortgage rates on 15 year fixed conforming loans surged almost 50 basis points this week. The average 15 year conforming rate is at 3.57 percent, up almost 50 basis points from last week’s average rate of 3.09 percent. Fixed conforming rates moved higher this week due to 10 year bond yields also moving sharply higher. 10 year bond yields were averaging 2.20 percent last week are now averaging 2.55 percent.

30 Year Mortgage Rates Move Above 4.00 Percent as we Predicted

Record Low Mortgage Rates are History as Fixed Rates Soar 50 Basis PointsWe predicted average 30 year mortgage rates would move above 4.50 percent but not as high as 4.50 percent in one week. This is the first time since July 11, 2011 that average 30 year rates are above 4.50 percent. The recent sharp run-up in mortgage rates has slowed demand for refinance loans but demand for loans for home purchases continues to move higher.

In EllieMae’s May Origination Insight Report, the percentage of home loans for a home purchase was 42 percent and the percentage for a refinance was at 58 percent. Back in January’s report, the percentages were 27 percent for a home purchase and 73 percent for a refinance. During that time, average 30 year mortgage rates moved up from an average of 3.45 percent to 4.51 percent today, an increase of over 100 basis points in just 6 months.

Mortgage Rates are Higher but Still Low Historically Speaking

Granted, mortgage rates have moved sharply higher in 2013, higher than most people anticipated, but rates are still low when compared to just a few years ago. Back in 2010, 30 year rates were above current levels and if you go back to the height of the housing bubble, average rates were in above 6.00 percent.

This coming week, average rates will continue their upward trend since 10 year U.S. Treasury yields continue to move higher. In the beginning of May, 10 year yields were around 1.60 percent. This morning 10 year yields are up another 3 basis points, averaging 2.55 percent – a very sharp increase in just over a month.

Jumbo Mortgage Rates Move Higher

Average 30 year mortgage rates will move to 4.75 percent and average 15 year rates will move to 3.75 percent. Jumbo mortgage rates also moved higher this past week but not as sharply as conforming rates. 30 year jumbo mortgage rates today are averaging 4.67 percent, 34 basis points higher from last week’s average of 4.33 percent.

Today’s mortgage rates on 15 year jumbo loans are now just below 4.00 percent at 3.99 percent. Last week average 15 year jumbo rates were at 3.67 percent. This coming week average 15 year jumbo rates will move above 4.00 percent and as high as 4.15 percent. Average 30 year jumbo rates will move towards 4.80 percent.

Average 5 Year Adjustable Mortgage Interest Rates

Short term adjustable mortgage rates moved higher this week as both 5 year conforming and jumbo rates are now above 3.00 percent. Average 5 year conforming mortgage rates are at 3.37 percent, up from the prior week’s average 5 year rate of 2.85 percent. 5 year jumbo adjustable mortgage rates are averaging 3.22 percent, up from last week’s average 5 year jumbo rate of 2.98 percent.

 
Author: Brian McKay
June 25th, 2013