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Mortgage Rates Just Above Yearly Lows – 30 Year Rates Averaging 4.19%

Mortgage rates are hovering just above the low for 2014. Conventional 30 year mortgage rates are currently averaging 4.19 percent, a decline from last week's average 30 year rate of 4.26 percent. The lowest point for 30 year conforming rates in 2014 was 4.12 percent earlier this month. The highest point was 4.53 percent back in January.

So far in 2014, mortgage rates have headed in the opposite direction than they were forecasted. Late in 2013, forecasts were for 30 year mortgage rates to hit 5.00 percent sometime this year. While this is still possible, it is getting more and more unlikely as we move into the 8th month of the year.

A more likely scenario is for 30 year conforming rates to remain near current levels. Rates probably won't move below 4.00 percent unless the situation in the Ukraine gets a lot worse and investors free equities to the safety of U.S. Treasuries. As investors buy bonds, bond prices move higher and bond yields move lower. Mortgage rates are tied to bond yields, so lower yields means lower rates on mortgages.

On the high end, average 30 year rates could move above 4.50 percent or even higher in 2014. The key to higher rates is a strong economy, a lower unemployment rate, and the threat of inflation. Several key economic reports will be released this week that could send bond yields and mortgage rates higher.

The most influential report will be nonfarm payrolls scheduled to be released this Friday at 8:30 AM. Forecasts are for 250,000 jobs having been created and for the unemployment rate to hold steady at 6.1 percent. Any decline in the unemployment rate or job growth higher than 300,000 will send rates higher.

Overall, mortgage rates will move higher from current levels. Strictly speaking in terms of rates, if you're thinking about refinancing your mortgage or buying a home, you should do so now. Refinance rates are probably at the low point for this year and likely at the lowest point we will ever see. Rates are moving higher in the coming years, so locking in a fixed long term rate is your best bet.

Listed below are average mortgage rates today for fixed conforming and fixed jumbo mortgages:

Average Conforming Mortgage Rates

  • 30 Year Rates 4.19%

  • 15 Year Rates 3.23%

Average Jumbo Mortgage Rates

  • 30 Year Rates 4.68%

  • 15 Year Rates 3.70%

The lowest rates available right now in our rate database are below:

Lowest Conforming Mortgage Rates Available

  • 30 Year Rates 3.625% 2 Mortgage Points

  • 15 Year Rates 2.75%  1 Mortgage Point

Lowest Jumbo Mortgage Rates Available

  • 30 Year Rates 3.75% 2 Mortgage Points

  • 15 Year Rates 3.125% 1 Mortgage Point

Author: Brian McKay
August 2nd, 2014