Current 30 Year Mortgage Rates Averaging 4.31 Percent Today

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Mortgage rates started 2014 on the downside, which caught many analysts off guard since the general consensus was mortgage rates would follow bond rates higher as a result of the Federal Reserve's policies. For many years now, the Federal Reserve's polices have been designed to suppress mortgage rates and bond rates to help the housing market recover, help the economy grow, and lower the unemployment rate.

The Fed's actions has brought the economy back from the worst recession since the Great Depression, helped the housing market recover from the worst bust since the Great Depression, and lowered the unemployment rate to 6.6 percent. The markets realize things are better and have been anticipating a higher fed funds rate and an end to quantitative easing.

The Fed has kept the fed funds rate near zero percent, sending deposit rates down to record lows. The Fed has embarked on several rounds of "quantitative easing" to force bond rates and mortgage rates down to record lows. The most recent round of quantitative easing, QE3, started over a year ago and involves the Fed buying $85 billion a month in mortgage-backed securities (MBS) and long term U.S. Treasuries.

Mortgage Rates Will Eventually Move Higher as Fed Ends Quantitative Easing

The fed funds rate won't be increased until sometime in 2015 but the Fed has already started paring back quantitative easing. Late in 2013, the Federal Reserve announced they would start tapering their mortgage-backed securities (MBS) and U.S. Treasury purchases. The Fed announced in December they would buy $10 billion a month less and in January, they made another $10 billion reduction. The purchases have been lowered from $85 billion a month to $65 billion a month and will continued to be lowered throughout 2014.

Last year when the markets realized the Fed would announce a reduction, both 10 year bond rates and 30 year mortgage rates increased over 1.25 percent in a matter of months. When the market's fears became a reality, rates actually started going down which was most likely a result of the 1.25 percent increase.

Make no mistake, current mortgage rates and bond rates are near lows for this year and will be moving higher in 2014. Forecasts are for 30 year mortgage rates to be around 5.00 percent by the end of this year, about 75 basis points higher than where 30 year mortgage rates are today.

Conforming 30 Year Mortgage Rates Today

Conforming 30 year mortgage rates today are averaging 4.31 percent, down from last week's average 30 year mortgage rate of 4.35 percent. Since the beginning of 2014, average 30 year mortgage rates have fallen 30 basis points but will be moving higher. Average 30 year rates will be back above 4.50 percent by the second quarter.

The best mortgage rates on 30 year conforming loans in our database right now are below the average and below 4.00 percent. The best rate right now is at 3.75 percent with 1.995 mortgage points. The best 30 year mortgage rates without points are also below the average at 4.00 percent.

Current 15 Year Conforming Mortgage Rates

Current mortgage rates on 15 year conforming loans are averaging 3.32 percent, down from last week's average 15 year mortgage rate of 3.37 percent. By April of this year average 15 year mortgage rates will be back above 3.50 percent and by the end of 2014 average 15 year rates will rise above 4.00 percent.

Today's mortgage rates on 15 year conforming loans can be found below the average rate and below 3.00 percent. The lowest 15 year refinance rates in our database are currently at 2.75 percent with 1.539 points. The lowest 15 year refinance rates today without points are at 3.00 percent.
Author: Brian McKay
March 1st, 2014