Since late spring there has been growing concern the Federal Reserve would slow down their bond purchases which has kept mortgage rates today at low levels. The Federal Reserve has been buying long term bonds through it’s rounds quantitative easing, currently the Federal Reserve is on it’s third round of easing, known as QE3.
Mortgage Rates Today Still Low Thanks to Federal Reserve’s Quantitative Easing
Until this spring the Federal Reserve’s easing has kept 30 year conforming mortgage rates under 4.00 percent. In the Winter of 2013 you could easily find lenders quoting fixed conforming mortgage rates on 30 year loans as low as 3.00 percent. Of course you had to pay points to obtain a 30 year mortgage rate that low.
Current mortgage rates on 30 year loans are about 1.00 percent higher thanks to 10 year bond yields going from 1.60 percent to almost 3.00 percent. Lenders tie mortgage rates offered on loans to 10 year U.S. bond yields. They do this because most of the time mortgage loans are repackaged together and sold to investors. Having a competitive interest rate on these securities allows them to be sold to investors.
Lowest 30 Year Mortgage Rates Today
The lowest 30 year mortgage rates today available are above 4.00 percent around 4.50 percent. 10 year bond yields are up another 0.05 percent today to 2.90 percent, this will send mortgage rates higher in the coming days. Higher mortgage rates combined with higher home prices across most of the U.S. is lowering home affordability.
Basically you can afford less home now that you could just a year ago since mortgage rates are up on average above 1.00 percent. Home prices are up on average about 10 percent, some home price increases have been higher or lower depending on the area of the country. Prices and rates have moved higher but homes are still more affordable then they were during the housing bubble.
Today’s Mortgage Rates on 15 Year Conventional Loans
Today’s mortgage rates on 15 year conforming loans have also moved considerably higher. Right now the lowest 15 year mortgage rates today quoted by lenders are above 3.00 percent. In March of 2013 you could easily find mortgage lenders quoting 15 year conventional mortgage rates as low as 2.50 percent with points.
The lowest 15 year refinance rates today on conventional loans are at 3.25 percent with points. The lowest 15 year mortgage refinance rates today without points are around 3.50 percent. If you’re looking into refinancing a 30 year mortgage you should refinance to a 15 year loan. While the monthly mortgage payments will be higher you will save a bunch of interest payments over the life of the loan.
Current Jumbo Mortgage Rates Today
Mortgage interest rates today on 30 year jumbo loans are nearing 5.00 percent. This rate is also much higher from earlier this year when there were lenders quoting jumbo mortgage rates as low as 3.75 percent with points. The lowest 30 year jumbo mortgage rates today are much higher at 4.875 percent with points.
Current mortgage rates today on 15 year jumbo loans are much higher than rates were just a few months ago. Back in early May you could easily find lenders quoting 15 year jumbo rates as low as 2.75 percent with points. Right now the lowest 15 year jumbo mortgage rates are around 3.50 percent.
Historically speaking current mortgage rates are still very low and we probably won’t see mortgage rates as low again for the next 30 years. I remember back in the early 1980′s mortgage rates were in the double digits. In 1983 during the height of a bad round of inflation average 30 year mortgage rates were above 17 percent!
So even if rates have increased 1.00 percent over the past many months rates are still very good. Don’t wait, if you’re close to buying a home or refinancing a mortgage loan do it today!