Mortgage Rates Lower Due to Emerging Market Fears and Lower Bond Yields

Just as everyone was predicting that mortgage rates would rise, so far the opposite has happened in 2014. Average mortgage rates are down for the third consecutive week because of lower long term bond yields. 10 year bond yields are down to 2.73 percent, a decline from 2.86 percent last Wednesday.

Mortgage rates today on 30 year conforming loans are averaging 4.33 percent, down from the previous week's average 30 year mortgage rate of 4.39 percent. The decline in average rates is remarkable considering that the Federal Reserve started winding down their purchases of mortgage-backed securities and long term bonds.

Mortgage Rates Down Thanks to Emerging Market Fears and Lower Bond Yields30 Year Mortgage Rates Will Decline This Week

At the end of December, average 30 year mortgage rates were above 4.50 percent and look to move to 4.75 percent. Now we will probably see average 30 year rates decline further this week if equity markets continue to fall. Investors have withdrawn money from emerging markets, sending equities tanking both abroad and in the United States.

Currently, equity indices are mixed. The Dow is up 26 points and the NASDAQ is down 33 points. 10 year bond yields are lower by 1 basis point to 2.73 percent. If the down trend continues this week, bond yields and mortgage rates will continue to decline. The move out of riskier assets into the safe haven of U.S. Treasuries is the classic flight to quality we see whenever there is any fear in the markets. As bond prices rise, bond yields move lower. Lenders quote mortgage rates based on bond yields, so when yields fall mortgage rates follow lower.

The lowest quoted 30 year conforming refinance rates on our rate table for the state of California are currently at 3.875 percent with 2 mortgage points. The lowest quoted rates for 30 year loans without points is currently at 4.115 percent. We have lenders quoting rates in all other states in the same range as the rates listed for California.

Current 15 Year Mortgage Rates

Average 15 year mortgage rates today are currently at 3.40 percent, down from the prior week's average 15 year mortgage rate of 3.45 percent. Late in 2013, average 15 year rates moved above 3.60 percent and looked to be headed as high as 3.75 percent. This coming week we will probably see average 15 year rates fall even lower, possibly as low as 3.25 percent.

If you're searching for 15 year refinance rates, we have lenders quoting rates well below the average rate of 3.40 percent. In the state of Georgia we have 4 lenders quoting 15 year refi rates on conforming loans at 2.875 percent with various points. The best rates without points in the state of GA are currently at 3.125 percent.

Today's 30 Year Jumbo Mortgage Rates

30 year jumbo mortgage rates are averaging 4.53 percent, a decline from last week's average 30 year jumbo mortgage rate of 4.57 percent. Late last year, average 30 year jumbo rates were heading towards 5.00 percent but now they will move back below 4.50 percent. This week average 30 year jumbo rates will fall to around 4.40 percent to 4.45 percent.

The best 30 year jumbo refinance rates right now in our database for the state of Florida are well below the average and below 4.00 percent. The lowest rate on 30 year jumbo loans is currently at 3.85 percent with 2 mortgage points. The lowest 30 year jumbo rates without points in the state of Florida is still below the average at 4.34 percent.

15 Year Jumbo Mortgage Rates Today

Average 15 year jumbo mortgage interest rates are currently at 3.97 percent, a decline from the prior week's average 15 year jumbo rate of 4.04 percent. This is the first time in a month that average 15 year jumbo rates are below 4.00 percent. This week the average rate could fall below 3.90 percent.

The lowest 15 year jumbo rates on our rate table are 60 basis points below the average rate. The best rate in the state of Texas is currently at 3.375 percent with 1 mortgage point. The lowest 15 year jumbo refi rate without points is at 3.50 percent, still below the average rate.

5/1 Adjustable Mortgage Rates

Average 5/1 conforming adjustable mortgage rates are at 3.52 percent, down from last week's average 5 year adjustable mortgage rate of 3.55 percent. The best 5 year adjustable rates in our database are more than 1.00 percent below the average at 2.375 percent with just under 2 points. The lowest 5 year rate without points is also way below the average at 2.625 percent.

Jumbo 5 year adjustable rates are currently averaging 3.09 percent, no change from last week's average 5 year jumbo rate. The best jumbo adjustable rate in our database are at 2.50 percent with 2 points and at 2.875 percent with no points.

Author: Brian McKay
January 28th, 2014
Posted in: Bank Mortgage Rates