Strong Employment Report Sends Mortgage Rates Higher
A surprisingly strong employment report for the month of February sent mortgage rates higher this week. February's employment report showed a gain of 236,000 jobs and the unemployment rate dropping to 7.7 percent, down from the prior month's average of 7.9 percent. As a result of strong job numbers, long term bond yields moved higher which subsequently sent mortgage rates higher.
Conforming 30 year mortgage rates today are averaging 3.71 percent, an increase from last week's average 30 year mortgage rate of 3.62 percent. Average mortgage rates have moved higher for several consecutive weeks as a slew of positive economic news has been released, pointing to an economic recovery in full swing.
As the economy improves, the Federal Reserve will pare back its stimulus policies of buying long term Treasuries and mortgage-backed securities. In anticipation of this, the markets have already sent bond yields higher and prices for MBS have also moved higher. The Fed will also start increasing interest rates once the unemployment rate falls below 6.50 percent. A higher federal funds rate, currently near zero percent, will also send mortgage interest rates higher.
Average 30 year rates moved higher but there are lenders still quoting 30 year refinance rates at record lows. Depending on the state, the lowest quoted 30 year conventional refinance rates in our database are between 3.25 percent and 3.50 percent with points. The lowest 30 year refinancing rates without points are slightly higher, between 3.375 percent and 3.625 percent, still below the average rate.
Current mortgage rates on 15 year conventional home loans are averaging 2.92 percent this week, an increase from last week's average 15 year mortgage rate of 2.90 percent. The lowest 15 year conforming mortgage rates in our rate database are well below the average rate. The lowest 15 year refi rate is at 2.25 percent with 2 mortgage points. The lowest 15 year rate without points in our database is at 2.50 percent.
Average 30 year jumbo mortgage rates bucked the uptrend this week and headed down slightly. Today's mortgage rates on 30 year jumbo loans are averaging 4.24 percent, a decline from last week's average 30 year jumbo mortgage rate of 4.27 percent. The lowest jumbo mortgage refinance rates on our rate list are still below 4.00 percent.
In the state of California, the lowest 30 year jumbo refinance rates are quoted at 3.50 percent with 2 mortgage discount points. The lowest 30 year jumbo refi rates without points on our California rate list are at 3.625 percent. For the state of Connecticut, the lowest 30 year jumbo refi rates are at 3.50 percent and the lowest rates are at 3.625 percent.
Average 15 year jumbo mortgage interest rates are at 3.45 percent, a slight increase from last week's average 15 year jumbo rate of 3.41 percent. Our rate list for the state of Colorado has lenders quoting 15 year jumbo refi rates as low as 2.75 percent with 2 mortgage points and at 3.125 percent with no points.
Average 5 year conforming adjustable mortgage rates are at 2.70 percent, an increase from last week's average 5 year adjustable rate of 2.68 percent. We have many lenders quoting 5 year adjustable refinance rates well below the average rate and well below 2.00 percent. The lowest 5 year adjustable refi rates in the state of Ohio are at 1.50 percent with 1.858 points and the lowest rates without points are at 2.125 percent.
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