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Mortgage Rates Retreat from Recent Highs

Mortgage rates are finally taking a breather from the recent increases and have declined the past week. Since the beginning of May, mortgage rates on 30 year conforming loans moved 1.00 percent higher from 3.50 percent to around 4.50 percent. In late June, 30 year mortgage rates shot up more than 50 basis points in just one week.

Mortgage Rates Retreat From Recent HighsThis past week, average 30 year conventional mortgage rates declined below 3.50 percent and are averaging 4.35 percent. The recent surge in mortgage interest rates is directly related to the increase in 10 year bond yields. The average 10 year bond yield increased from 1.60 percent to 2.60 percent over the past three months.

Looking out over the next coming weeks and months, bond yields and mortgage rates will be remain stable around current levels. Average 30 year rates will stay in a range of 4.00 percent to 4.50 percent. Although 30 year conforming rates are around 4.50 percent, there are still many lenders quoting rates just below 4.00 percent if you're willing to pay points on the loan.

Average 15 year mortgage rates this week are at 3.43 percent, unchanged from last week's average rate. 15 year rates have also moved considerably higher since early May. On May 5, average 15 year conforming rates were at 2.55 percent and this past week the average 15 year rate is higher at 3.43 percent. The high for 15 year mortgage rates was 3.67 percent, set in early July.

Over the next several weeks and months, average 15 year rates will be in a range near current levels. On the high end, we could see 15 year rates move above 3.60 percent and on the low end, 15 year rates could fall to around 3.20 percent. Currently, there are many lenders quoting 15 year mortgage rates below 3.00 percent at 2.87 percent with points.

Mortgage rates today on 30 year jumbo mortgage loans are averaging 4.69 percent, up from last week's average rate of 4.63 percent. The recent high for 30 year jumbo mortgage rates was 4.80 percent set in early July. Over the next coming months average 30 year jumbo rates will probably move as high as 4.90 percent and as low as 4.40 percent.

The move higher in average jumbo rates hasn't been as dramatic as conforming rates. The reason being jumbo rates never fell as much as conforming rates so the bounce higher as been smaller. Since recent lows jumbo rates have only increase around 75 basis points, lower than the 100 basis point increase in conforming rates.

 Current mortgage rates on 15 year jumbo loans are averaging 4.03 percent, an increase from the prior week's average 15 year rate of 3.98 percent. The recent high for 15 year jumbo rates was 4.23 percent. Over the next two months the probable range for 15 year jumbo rates will be between 3.75 percent and 4.25 percent.

Adjustable mortgage rates on 5 year conforming loans this week are averaging 3.40 percent, up slightly from last week's average rate of 3.39 percent. Average 5 year adjustable jumbo mortgage rates are slightly lower from 3.22 percent to 3.20 percent. Adjustable rates have increased over the past three months but the increases have been small. 5 year conforming rates were averaging 2.80 percent and 5 year jumbo rates were averaging 2.90 percent three months ago.

While the chance to refinance a mortgage has probably gone out the window for millions of homeowners because refinance rates are higher if you're thinking of buying a home rates are still historically low. Another factor that makes now a good time to buy a home is home prices are still lower than recent highs during the housing bubble.

Low mortgage rates and lower home prices makes home affordability the best it's been in our generation. Even with the recent increase in mortgage rates and home prices you are probably going to be in the best position to buy now instead of later. You can search for and compare rates by searing our lender database at
Author: Brian McKay
July 28th, 2013