Mortgage rates return to 2014 lowsby Tim Manni
Last Monday we said, “We actually have a shot at setting 2014 lows this week if investors continue to shun stocks at the rate they have lately, and especially if there’s nothing in the economic news of concern.”
Well, that all seemed to be the case last week as mortgage rates returned to the lowest point last seen in February.
What’s causing mortgage rates to fall?
There has been a collection of factors in recent weeks forcing interest rates downward, including:
- A gyrating stock market
- Political trouble and economic softness overseas
- Soothing words from the Federal Reserve about the prospects for changes in monetary policy
“At various points, all have served as reasons for investors to move into the relative safety of Treasury bonds, pushing yields and mortgage rates to the bottom of a six-month-long range,” wrote Keith Gumbinger, vice president, in HSH.com’s latest Market Trends newsletter.
Current mortgage rates
Here are the latest weekly averages according to HSH.com:
- 30-year: The overall average rate for 30-year fixed-rate mortgages (conforming, non-conforming and jumbo) dipped by 0.05 percent to drop back to 4.38 percent, matching a previous 2014 low set during the week ending February 7
- 15-year: The overall average rate for 15-year fixed-rate mortgages (conforming, non-conforming and jumbo) eased by 0.04 percent, falling to 3.53 percent for the week ending April 18 and close to 2014 bottoms
- FHA: FHA-backed 30-year fixed-rate mortgages shed 0.03 percent on average to slip to 4.07 percent for the week
- ARMs: The overall 5/1 Hybrid ARM also declined by 0.05 percent, ending the week at an average of 3.07 percent
What’s the future for mortgage rates?
Apparently, these historic lows could be short lived.
”Not reflected in [last] week’s figure, the strong Philly Fed report fostered a selloff in Treasuries on Thursday, producing a corresponding lift in yields of about 10 basis points,” wrote Gumbinger on Friday. “With markets in holiday mode for Good Friday, we’ll not see the effect of that bump until early [this] week, which should be sufficient to stop the fall in rates, if nothing else.”
If you’re shopping for mortgage rates this spring, understand that, if joined with other positive news, economic reports which showcase some form of winter recovery can be expected to firm mortgage rates.
We expect new data out this week, including new and existing home sales, to trend positive, and that “mortgage rates will lift a few basis points off [last] week’s 2014 bottoms by the time [this]Friday rolls around,” concluded Gumbinger.