Mortgage Rates Hold Steady This Week as 10 Year Bond Yields Rise Above 2.25%

Mortgage rates held steady this week but will increase in the coming days because of higher bond yields. Average 30 year mortgage rates today are at 3.83 percent, down slightly from last week's average 30 year rate of 3.85 percent. By the end of this week 30 year mortgage rates will hit 4.00 percent, a level not seen for several months.

10 year U.S. bonds increased 12 basis points yesterday to 2.27 percent. Yields increased to the highest level in more than 5 months because of looming new bond sales by the U.S. government. Another factor sending yields higher in the U.S are higher German bond yields.

Mortgage Rates May 12 2015For the past year, U.S. bond yields were held down by global demand for U.S. bonds. Investors got a better return in 10 year U.S. bonds yielding around 2.00 percent. 10 year German bond yields were almost negative a month ago but have since risen to 0.70 percent.

Now that German bond yields are increasing sharply, U.S. bond yields are also moving higher. Mortgage lenders set mortgage rates based on 10 year U.S. bond rates. When bond rates increase, mortgage rates also move higher.

If you're looking for the best rates to finance the purchase of a home or refinance your current loan do so sooner than later. Rates are increasing this week but right now in our rate database, we have lenders quoting 30 year refinance rates at 3.75 percent with mortgage points.

Mortgage rates today on 15 year conforming loans are currently averaging 3.00 percent, down from last week's average 15 year rate of 3.03 percent. In the database of rates, there are lenders still quoting 15 year refinance rates under 3.00 percent.

Checking on the table for California there is one lender, California Home Lending, quoting 15 year refinance rates at 2.625 percent with 0.126 points. There are also a few other lenders quoting 15 year rates below 3.00 percent with points and without points.

Current mortgage rates on 30 year jumbo loans are averaging 4.22 percent, down from the prior week's average jumbo rate of 4.25 percent. The lowest 30 year jumbo refinance rates in the database are at 3.625 percent with 2 mortgage points. The lowest rate without points is at 3.875 percent.

Today's mortgage rates on 15 year jumbo loans are averaging 3.80 percent, down from the previous week's average rate of 3.87 percent. The best 15 year jumbo refi rates in the database for California are currently at 2.875 percent with points and at 3.125 percent with no points.

Author: Brian McKay
May 12th, 2015