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Today’s Mortgage Rates Move Lower as Refinance Demand Continues to Drop

Today’s Mortgage Rates Move Lower as Refinance Demand Continues to Drop

Today's mortgage rates moved lower as a result of U.S. Treasury yields going lower. Average 30 year refinance rates are at 4.31 percent, a decline from last week's average 30 year refinance rate of 4.39 percent. Since the start of 2014, average mortgage rates have fallen, following 10 year treasury yields lower.

Average 30 year rates are at 4.31 percent but you can easily find lenders quoting 30 year rates below the average. The lowest 30 year mortgage rates quoted right now on our rate table is at 3.875 percent with less than 2.00 points. If you'd rather not pay points, the lowest 30 year rates we have are quoted at 4.125 percent, which is still below the average rate.

Mortgage Rates Lower on Heels of Federal Reserve Tapering

At the beginning of the year, 30 year mortgage rates were above 4.50 percent at 4.57 percent. Average rates were predicted to move towards 5.00 percent because the Federal Reserve started tapering their purchases of long term U.S. bonds and mortgage-backed securities. The Fed had been buying $85 billion a month in these securities but announced in December that they would buy $10 billion less a month starting in January.

The Fed also announced in January that starting in February they would buy only $65 billion a month. The Fed is expected to continue tapering their purchases in 2014, eventually stopping their buys sometime later this year. The prospect of this happening sent average mortgage rates and long term bond yields over 1.00 percent in 2013.

Refinancing Loan Demand Declines

Now that the tapering is actually happening, the good news for those buying a home is that rates are not moving higher but higher refinance rates snapped demand for homeowners refinancing their mortgage. The Mortgage Bankers Association's most recent Weekly Mortgage Survey showed demand for home loans increasing while the refinancing share of loans continues to fall.

The refinance share of mortgage loans decreased to 57.7 percent of total applications for the week ending February 28, 2014, down from 58 percent the previous week. Refinance share of loans is at the lowest level since early September of 2013. The general rule when refinancing a loan is that it makes financial sense if the rate on your loan is at least 1.00 percent higher than current rates.

Refinance to a Shorter Term Mortgage

If you missed the refinance window because rates are higher, you might still have an option to refinance to a shorter term mortgage. For example, if your current mortgage is a 30 year loan, it will still make financial sense to refinance to a shorter term loan like a 15 year loan or even a 10 year loan.

Even if 15 year and 10 year mortgage rates are not 1.00 percent lower than your current mortgage rate, refinancing will still save you money. You can use a mortgage calculator to figure out if refinancing to a shorter term loans makes sense for you. The only drawback to a 15 year or 10 year loan over a 30 year loan is the monthly mortgage payments will be higher.

Average 15 Year Mortgage Rates Today

15 year mortgage rates today are averaging 3.32 percent, a decline from last week's average 3.38 percent. Earlier this year average 15 year mortgage rates were above 3.50 percent and were headed towards 3.75 percent. Now it looks like rates will decline to near 3.25 percent.

The best 15 year refinance rates on our rate table are almost 50 basis points below the average 15 year rate. The lowest 15 year rate quoted by lenders right now is at 2.875 percent with 2 mortgage points. The best 15 year rate without points is quoted at 3.375 percent.

Current Jumbo Mortgage Rates on 30 Year Mortgages

The average 30 year jumbo mortgage rate is currently at 4.28 percent, down from the previous week's average 30  year jumbo rate of 4.37 percent. During the first week of January 2014, average 30 year jumbo rates were above 4.50 percent at 4.63 percent. Average rates looked to head towards 5.00 percent but now it appears rates will fall closer to 4.00 percent.

The lowest current jumbo rates quoted by lenders in our rate table are at 4.25 percent with no mortgage points.

Today's 15 Year Jumbo Rates

Average 15 year jumbo mortgage rates today are at 3.69 percent, down from the prior week's average 15 year jumbo mortgage rate of 3.75 percent. Average 15 year jumbo rates will probably fall back under 3.50 percent which is a big change from earlier this year when 15 year rates were slightly above 4.00 percent.

The best 15 year jumbo rates on our rate list are below the average at  3.25 percent with no mortgage points.

5/1 Conforming Adjustable Mortgage Rates

Average 5 year conforming adjustable rates are currently at 3.39 percent, down from last week's average 5 year adjustable mortgage rate of 3.42 percent. Average 5 year adjustable rates haven't moved as much as fixed rates the past year since shorter term bond yields haven't changed much.

The best 5 year adjustable rate on our rate list is over 1.00 percent lower than the average rate. The lowest 5 year adjustable refinance rate today is at 2.125 percent with 1.77 mortgage points. The lowest 5 year conforming adjustable rate without points is still way below the average at 2.625 percent.

5 year Jumbo Adjustable Rates

5 year jumbo adjustable mortgage rates are currently averaging 2.84 percent, a decline from last week's average 5 year jumbo rate of 2.89 percent. For the past year average 5 year jumbo rates have been lower than average 5 year conforming rates. The lowest 5 year jumbo rate on our rate list is also below the average rate.

Right now the lowest 5 year jumbo adjustable rate in our database is at 2.375 percent with 1.75 mortgage points. The best 5 year jumbo rate on our rate table is at 2.75 percent, still below the average rate.

Author: Brian McKay
March 10th, 2014