Mortgage Rates are Stable as Fed Drops Bond and MBS Purchases to $55 Billion a Month

Mortgage rates haven't moved higher in 2014 despite the Federal Open Market Committee continuing to reduce the latest round of quantitative easing. In last week's committee meeting, the Fed decided to reduce their purchases of mortgage-backed securities and long term bonds by another $10 billion a month.

Since the beginning of the year, the amount the Fed has been purchasing has gone from $85 billion a month down to $55 billion a month and they plan to continue reducing the amount throughout 2014. Mortgage rate analysts believed the Fed reducing their purchases would send mortgage rates higher but that hasn't happened...yet.

30 year mortgage rates today are averaging 4.33 percent, down from last week's average 30 year mortgage rate of 4.36 percent. Back on January 1, 2014, average 30 year mortgage rates were actually higher at 4.56 percent. Average mortgage rates will eventually move higher in 2014 but not by much. The Mortgage Bankers Association is predicting average 30 year rates will hit 5.00 percent by the end of the year.

Current mortgage rates on 15 year conforming loans are averaging 3.36 percent this week, unchanged from last week's average 15 year mortgage rate. So far during 2014, average 15 year mortgage rates have also moved lower. On January 1st of this year, 15 year mortgage rates were averaging 3.57 percent.

Today's mortgage rates on 30 year jumbo mortgage loans are currently averaging 4.74 percent, a sharp increase from last week's average 30 year jumbo mortgage rate of 4.39 percent. The sharp increase is only temporary and average 30 year jumbo mortgage rates will fall back below 4.50 percent this coming week.

30 year jumbo rates are higher this week but overall lower for 2014. 30 year rates are only up 10 basis points. On January 1st, average 30 year jumbo rates were at 4.64 percent. These rates are only average rates, as there are many lenders quoting 30 year jumbo rates well below the average. Lenders in our database are currently quoting 30 year jumbo refinance rates as low as 4.125 percent with 2 mortgage points.

15 year jumbo mortgage rates today are averaging 4.17 percent, down from last week's average 15 year jumbo mortgage rate of 4.20 percent. Average 15 year jumbo rates were slightly lower at the beginning of the year, back on January 1, when average 15 year rates were at 3.89 percent. The best 15 year jumbo refinance rates in our database are much lower at 3.50 percent with 1.10 mortgage points.

5/1 conforming adjustable mortgage rates are averaging 3.37 percent, down from last week's average 5 year adjustable mortgage rate of 3.40 percent. Average 5 year conforming adjustable rates are also lower this year. Back on January 1st, average 5 year rates were at 3.74 percent. The best adjustable refinance rates in our database are more than 1.00 percent lower. The lowest rates quoted in our database this week are at 2.375 percent with 1.912 mortgage points.

Jumbo adjustable mortgage rates on 5/1 loans are currently averaging 3.54 percent, up sharply from last week's average 5 year jumbo rates of 2.92 percent. As with 15 year jumbo rates, 5 year adjustable rates will decline next week and will probably be around the 3.00 percent level. At the beginning of 2014, average 5 year jumbo adjustable rates were at 3.02 percent. The lowest 5 year jumbo refi rates quoted by lenders in our database are at 2.625 percent with 1.10 points.

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