Mortgage Rates Continue to Rise as 10 Year Treasury Yields Move Higher
Mortgage rates drifted higher this President's Day thanks to higher 10 year Treasury yields. 10 year yields which started last week below 2.00 percent, closed at 2.01 percent on Friday. As a result of higher yields, average 30 year mortgage rates today increased to 3.66 percent, up from last week's average 30 year mortgage rate of 3.61 percent.
Average mortgage rates on 30 year conforming loans moved higher in 2013 but rates are still less than 50 basis points above all-time record lows. The average record low was 3.27 percent, set back in November 2012. Whether or not we see record low mortgage rates in 2013 depends on the sequester and fiscal year 2013 budget.
If Democrats and Republicans fail to act responsibly on these two issues and throw the economy into a recession, both bond yields and mortgage rates will plummet to new record lows.
If politicians can come to an agreement and avoid a recession, the economy will take off. While a stronger economy would lead to higher yields and rates the increases will be minimal. 10 year bond yields would remain under 2.50 percent and 30 year mortgage rates would remain under 4.00 percent.
Current mortgage rates on 30 year jumbo loans remained unchanged this week at 4.12 percent. The all-time record low for 30 year jumbo mortgage rates are just below 4.00 percent at 3.91 percent. A recession in 2013 would force 30 year jumbo rates as low as 3.75 percent on average. If there isn't a recession, average 30 year jumbo rates would move as high as 4.50 percent.
Today's mortgage rates on 15 year conventional loans are averaging 2.92 percent, an increase from last week's average 15 year mortgage rate of 2.90 percent. The record low for 15 year mortgage rates was 2.78 percent, set back in November 2012. You can actually find lenders quoting 15 year mortgage refinance rates well below the average rate. The lowest refinance rates on 15 year conforming loans in our database are at 2.25 percent with points.
Average 15 year jumbo mortgage rates are at 3.41 percent, an increase from last week's average 15 year jumbo mortgage rate of 3.39 percent. The record low for 15 year jumbo rates was 3.17 percent set in November 2012. Current 15 year jumbo rates can be found as low as 2.875 percent to 3.125 percent with points.
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