Mortgage Rates

Mortgage rates and bond yields have surged higher over the past three months. The increase in rates and yields accelerated since Donald Trump won the Presidential Election. The month before the election, average 30 year conforming mortgage rates were at 3.54 percent. 30 year mortgage rates today are above 4.00 percent, averaging 4.18 percent.

During the same time, 10 year U.S. Treasury yields rose from around 1.60 percent to today’s yield of 2.60 percent, a 100 basis point increase. We expect even higher rates and yields in 2017 because the Federal Open Market Committee is expected to increase rates.

The FOMC anticipates increasing the fed funds rate by 0.75 percent in 2017 and may possibly increase the rate more if needed. This will put upward pressure on Treasury yields, which in turn will put upward pressure on mortgage rates. 10 year Treasury yields could hit 3.50 percent and average 30 year mortgage rates might hit 5.00 percent by the end of 2017.

15 year mortgage rates are also moved sharply higher over the past three months. In late September of this year, average 15 year mortgage rates were around 2.75 percent. 15 year mortgage rates today are much higher, averaging 3.33 percent, an increase of 58 basis points. 15 year mortgage rates will likely hit 4.00 percent by the end of 2017.

On a percentage basis, the current increase for both 30 year rates and 15 year rates are even higher. Average 30 year mortgage rates increased by 18 percent and average 15 year mortgage rates increased by 21 percent in 3 months. You can see an archive of average mortgage rates for 2016 at Freddie Mac Mortgage Rate Archive.

Unfortunately, for homeowners financing their purchase, higher mortgage rates are here and will continue to move higher. If you’re a potential homebuyer, now is time to lock in a mortgage rate before rates increase. The higher the mortgage rates, the higher your monthly mortgage payment will be and the less home you can afford.

The rates mentioned above are average rates but you can still find lenders quoting mortgage rates below the average. If you’re comparing mortgage rates, you can see a list of lenders listed in your state by searching our rate lists at Mortgage Rates.