Mortgage Rates Surge Back to 6-Week Lows
April 1, 2016
Market Summary
Mortgage Rates came through in a pinch this week, falling to the lowest levels in more than a month by Friday. The "pinch" in question saw the previous week end with rates much closer to recent highs, levels that haven't been broken since early January.
More than anything, it was a speech from Fed Chair Yellen on Tuesday that helped both stocks and bonds. Yellen more than confirmed that accommodative undertones in the most recent Fed Announcement. She even pointed at the Fed's bazooka, saying there were ways to add accommodation even with rates at zero.
If you're wondering why Yellen is talking about rates going back to zero in the middle of a supposed hiking cycle, so was everyone else! The only interpretation was that the Fed is at least concerned enough about negative economic outcomes to be talking about how they'd respond to them.
The rest of the week was merely spent digesting those improvements, with the traditional motivations like the big jobs report doing very little to push rates off course. The average lender got back to 3.625% on conventional 30yr fixed quotes for top tier scenarios.
-Matt Graham, Chief of Operations, Mortgage News Daily
30 Year Fixed Rate Mortgage
Week in Review
Rates shown below are based on the 30 Year Fixed Rate Mortgage
Beginning Average:
|
3.79%
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Ending Average: |
3.65% |
Weekly Change: |
-0.14% |
Yearly Change: |
+0.13% |
Monday, March 28, 2016 : 3.79% (+0.00%)
Mortgage rates were decidedly mixed today, depending on the lender. Some were in better shape compared to last Thursday (markets were closed on Friday) while others were decidedly worse. Most of the differences between lenders can be explained by last week's pricing strategies heading into the holiday weekend. Bond markets were under pressure on Thursday afternoon. That typically means lenders will be increasing rates and putting out new rate sheets in the middle of the day. Indeed, that happened in quite a few cases on Thursday. Other lenders simply left the morning rate sheets intact, and they're the ones who moved to higher rates today, effectively getting caught up with the rest of the market.
Tuesday, March 29, 2016 : 3.75% (-0.04%)
Mortgage rates moved decisively lower today, following a speech from Fed Chair Janet Yellen. While she accomplished it in several ways, Yellen's overarching message was that the Fed is in no hurry to raise rates. Keep in mind, the Fed Funds Rate is not the same as mortgage rates. In fact, the two can move in opposite directions at times. In general though, when the Fed is perceived as providing more accommodation (via low rates or various bond buying programs), it's good news for all sorts of financial markets, including the market for mortgage-backed-securities (MBS) that ultimately dictate mortgage rates.
Wednesday, March 30, 2016 : 3.74% (-0.01%)
Mortgage rates held steady in most cases today, though several lenders continued to improve. The average lender is at least down to 3.75% in terms of conventional 30yr fixed rates on top tier scenarios, but many are already back to 3.625%. Yesterday's strong gains came courtesy of a speech from Fed Chair Yellen, and today provided an opportunity for financial markets to confirm their intentions. If the Yellen-inspired drop in rates was going to be a temporary knee-jerk movement, we would have seen evidence of that today. As it stands, this sideways movement is the market's way of getting comfortable with heading back toward lower rates. It's not necessarily a given, but the point is that it hasn't been ruled out.
Thursday, March 31, 2016 : 3.71% (-0.03%)
Mortgage rates dropped again today, continuing a recent trend of improvement and bringing us to the best levels seen since March 1st. Market volatility is still making for a wide variety of pricing strategies between lenders with some of them easily back down to 3.625% on conventional 30yr fixed quotes while others aren't quite there yet. Either way, the average lender is more likely to be quoting 3.625% on top tier scenarios than on any other day this month.
The timing is dramatic, with today being the last day of the month/quarter and also the day before the important Employment Situation report (aka "jobs report"). The month/quarter-end designation is important because it creates a relative frenzy of trading activity regardless of the economic data or events. When there are big moves like this, they almost always guarantee a bigger move on the following day. It just so happens that the following day is already doing just fine as far as motivations for big moves, because the jobs report is the most important piece of economic data on any given month.
Friday, April 1, 2016 : 3.65% (-0.06%)
Mortgage rates continued lower today, despite a fairly strong showing in the Employment Situation report. The so-called 'jobs report' is the most important piece of economic data on any given month and it always has the potential to cause big moves in rates. This time around, the data was close enough to forecast levels that it didn't have a big impact on the bond markets that underly mortgage rate movement.
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Today's Rates
30 Yr FRM
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3.65%
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-0.06
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15 Yr FRM
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2.94%
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-0.03
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FHA 30 Year Fixed
|
3.25%
|
+0.00
|
Jumbo 30 Year Fixed
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3.52%
|
-0.03
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5/1 Yr ARM
|
2.95%
|
+0.00
|
|
Average Mortgage Rates
15 Yr. Fixed
|
3.45%
|
1.20
|
-0.01
|
30 Yr. Fixed
|
4.12%
|
1.43
|
-0.05
|
30 Yr. Fixed
|
3.93%
|
0.35
|
-0.01
|
15 Yr. Fixed
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3.18%
|
0.34
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-0.04
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30 Yr. Jumbo
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3.85%
|
0.27
|
-0.01
|
30 Yr. FHA
|
3.74%
|
0.32
|
-0.03
|
5/1 ARM
|
3.13%
|
0.36
|
-0.10
|
30 Yr. Fixed
|
3.71%
|
0.50
|
+0.00
|
15 Yr. Fixed
|
2.98%
|
0.40
|
+0.02
|
1 Yr. ARM
|
2.68%
|
0.20
|
+0.01
|
5/1 Yr. ARM
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2.90%
|
0.50
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+0.01
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* FHFA averages are updated monthly. ** Mortgage Bankers Association (each Wednesday) and Freddie Mac (each Thursday) averages are updated weekly.
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Secondary Markets
30YR FNMA 3.0
|
102.67
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+0.05
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30YR FNMA 3.5
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104.92
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+0.05
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30YR GNMA 3.0
|
103.61
|
+0.16
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30YR GNMA 3.5
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105.64
|
+0.09
|
15YR FNMA 3.0
|
104.53
|
+0.06
|
15YR FNMA 2.5
|
102.69
|
0.00
|
2 YR
|
0.7521%
|
+0.0192
|
5 YR
|
1.2257%
|
+0.0161
|
10 YR
|
1.7740%
|
+0.0001
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30 YR
|
2.5981%
|
-0.0161
|
Prices as of: 4/1/2016 4:30PM EST
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