Mortgage Rates Remain Low Because of Global Bond Yields Falling

Mortgage rates remain low this week, continuing to defy the experts who called for higher rates in 2015. Interest rates were supposed to increase this year because of stronger economic growth in the United States. Growth, for the most part, has been strong in 2015, but bond yields have actually declined.

Current 10 year U.S. bond yields are yielding 1.88 percent, down from the December 31, 2014, high of 2.17 percent. U.S. bond yields moving lower are the result of yields in German and Japan crashing. The European Union recently released quantitative easing to foster growth which has forced already low German yields even lower.

German bonds that mature in less then 10 years have a negative yield. You actually have to pay Germany a yield to buy their short term bonds. 10 year German bonds are only yielding 0.09 percent, much less than U.S. 10 year yields at 1.88 percent. 10 year Japanese bonds are also much than U.S. yields at 0.39 percent.

Investors around the world are buying U.S. bonds to get a better yield. As a result of the demand, U.S. bond prices are moving higher and bond yields are moving lower. Most lenders set mortgage rates to 10 year bond yields, when yields decline, mortgage rates also move lower.

Instead of seeing 30 year conforming mortgage rates hit 5.00 percent this year as forecast, we might see 30 year rates stay under 4.00 percent. Average 30 year conforming mortgage rates today are at 3.76 percent, a slight uptick from last week's average rate of 3.74 percent.

Average 30 year rates are at 3.76 percent but there are many lenders quoting rates below the average. Currently on our mortgage rate list for California, we have one lender quoting 30 year refinance rates at 3.50 percent with 1 mortgage point. When you pay points on a loan you can get a lower rate. You might be able to get an even lower rate by paying more than 1 mortgage point.

Current mortgage rates on 15 year conventional loans are averaging 2.96 percent. Up slightly from last week's average 15 year rate of 2.94 percent. The best 15 year refinance rates on our rate list for CA is lower at 2.875 percent with 1 mortgage point.

Today's mortgage rates on 30 year jumbo loans are averaging 3.97 percent, up from the prior week's average 30 year jumbo rate of 3.94 percent. The best 30 jumbo refinance rates available on our rate list for Washington State are much lower at 3.375 percent with 1 point.

15 year jumbo mortgage rates today are averaging 3.81 percent, up from the previous week's average rate of 3.52 percent. The lowest 15 year jumbo refi rates available on our rate list for Colorado are almost 1.00 percent lower at 2.875 percent with 1 point.

Compare mortgage refinance rates by using the rate list for the state you live in: Search Mortgage Rates