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Mortgage Rates March Higher as 30 Year Conforming Rates Move Above 4.50 Percent

Mortgage Rates March Higher as 30 Year Conforming Rates Move Above 4.50 Percent

Mortgage rates continue to march higher this week, driven higher by the relentless increases in 10 year bond yields. Conventional 30 year conforming mortgage rates today have moved above 4.50 and are averaging 4.64 percent. This is the first time since July 11, 2011 that 30 year rates have moved above 4.50 percent.

A mere two months ago, 30 year rates were just above record lows, averaging 3.53 percent. Only one month ago, 30 year rates were averaging 3.81 percent. 10 year bond yields also moved higher the past two months. Back on May 2nd, 10 year yields averaged 1.66 percent, yesterday 10 year yields closed at 2.65 percent.

Some lenders use 10 year bond yields as a barometer to set mortgage rates which is why rates move higher when bond yields move higher and rates move lower when yields move lower. Other lenders use the LIBOR rate, The London Interbank Offered Rate, to set mortgage rates. Our average mortgage rates in our free mortgage rate widget are set by 10 year bond yields.

Mortgage Rates Continue to March Higher as 30 Year Conforming Rates Move Above 450 PercentCurrent mortgage rates on 15 year conforming loans also moved sharply higher over the past few months. In April, average 15 year mortgage interest rates tied record lows set late in 2013. The lowest rate on 15 year conforming loans was 2.66 percent, last week the average 15 year rate was at 3.41 percent, and this week the average rate is at 3.61 percent.

In just a few months, average rates on both 30 year and 15 year conforming loans are around 100 basis points higher. While the increase in rates has stopped loan demand for refinancing, higher rates still haven't cooled the housing market. Both home sales and home prices are moving sharply higher due to the low amount of homes available for sale.

Fixed conforming rates are not the only rates moving higher. Rates are moving higher on all products including jumbo loans and adjustable loans. Today's mortgage rates on 30 year jumbo loans are averaging 4.78 percent, up from last week's average 30 year jumbo rate of 4.55 percent. In early May, 30 year jumbo rates were averaging 4.94 percent and just last month 30 year rates were at 4.55 percent.

Average 15 year jumbo mortgage rates today are at 4.10 percent, an increase from the previous week's average 15 year jumbo rate of 3.94 percent. Last month on June 10, average 15 year jumbo interest rates were at 3.59 percent and rates were even lower in early May when they averaged 3.35 percent.

5 year adjustable mortgage rates currently are averaging 3.68 percent, a sharp increase from last week's average 5 year adjustable rate of 3.25 percent. In late April, average 5 year adjustable rates were over 100 basis points lower at 2.58 percent. You can still find lenders quoting 5 year adjustable rates around 2.50 percent. Currently on our rate table, AimLoan is quoting 5 year adjustable refinance rates at 2.625 percent with points.

Jumbo adjustable mortgage rates on 5 year loans are also sharply higher this week and up considerably over the past two months. Current 5 year jumbo adjustable rates are at 3.36 percent, up from last week's average jumbo rate of 3.26 percent. Back in early May, 5 year jumbo rates were averaging 2.55 percent. The lowest 5 year jumbo rates in our database are just under 3.00 percent at 2.875 percent with points.

Author: Brian McKay
July 9th, 2013