Benchmark 30-Year Mortgage Rate Sinks After Fed Intervention

The benchmark 30-year fixed-rate mortgage fell this week to 3.75 percent from 3.88 percent, according

The benchmark 30-year fixed-rate mortgage fell this week to 3.75 percent from 3.88 percent, according to Bankrate’s weekly survey of large lenders.

The Federal Reserve is on an asset-buying spree in an effort to keep the housing market afloat and stabilize mortgage rates. This is likely good news for people looking to take out a mortgage or refinance.

Mortgage rates have been volatile, jumping some 32 basis points in just two weeks prior to this to 3.88 percent, according to Bankrate’s national survey. Meanwhile, the 10-year Treasury has plunged back below 1 percent, which means fixed-rate mortgages may also trend down in the days to come.

A year ago, the 30-year fixed was 4.17 percent. Four weeks ago, the rate was 3.71 percent. The 30-year fixed-rate average for this week is 0.61 percentage points below the 52-week high of 4.36 percent, and is 0.19 percentage points greater than the 52-week low of 3.56 percent.

The 30-year fixed mortgages in this week’s survey had an average total of 0.29 discount and origination points.

Over the past 52 weeks, the 30-year fixed has averaged 3.94 percent. This week’s rate is 0.19 percentage points lower than the 52-week average.

  • The 15-year fixed-rate mortgage fell to 3.06 percent from 3.13 percent.
  • The 5/1 adjustable-rate mortgage rose to 3.64 percent from 3.51 percent.
  • The 30-year fixed-rate jumbo mortgage rose to 3.92 percent from 3.81 percent.

At the current 30-year fixed rate, you’ll pay $463.12 each month for every $100,000 you borrow, down from $470.52 last week.

At the current 15-year fixed rate, you’ll pay $693.47 each month for every $100,000 you borrow, down from $696.85 last week.

At the current 5/1 ARM rate, you’ll pay $456.90 each month for every $100,000 you borrow, up from $449.60 last week.

Results of Bankrate.com’s weekly national survey of large lenders conducted March 25, 2020 and the effect on monthly payments for a $165,000 loan:

Where mortgage rates are headed

In the week ahead (March 25-31), 33 percent of the experts polled each week by Bankrate predict that rates will rise, 17 percent of the experts predict a drop in rates and 50 percent predict that rates will remain relatively unchanged (plus or minus 2 basis points).

The theme this week is unpredictability–all bets seem to be off as the mortgage markets are behaving in ways not seen before.

“The traditional methods of what drives mortgage rates, looking at the 10-year Treasury yield and prices of mortgage-backed securities, have gone out the window. These days rates vary greatly between lenders, from day to day, and even hour to hour. Some lenders are forced to hike their rates due to capacity constraints and other issues,” said Logan Mohtashami, senior loan officer, AMC Lending Group, Irvine, California.

That sentiment was echoed by Michael Becker, branch manager, Sierra Pacific Mortgage, White Marsh, Maryland: “Good luck forecasting rates when lenders are falling out every day. However, the 10-year yield liquidation looks like it has ended. The increase in MBS purchasing should help. However, we should be at 3 percent or lower today and, until we get a more fluid marketplace, we are at the mercy of all this drama.”

For homebuyers and refinancers, a guessing game

Rate watchers want to know if this is the time to jump on low mortgage rates or if they should wait a little longer in hopes of getting even deeper discounts on loans.

Bankrate polls experts each week on the direction of mortgage rates.

Keep in mind that many lenders have raised their posted rates to discourage inquiries because they are so busy. It’s important to call the lender to find out if they can do better than a rate you see online; oftentimes they can.

There is also the possibility that the spread between the Treasury yields and mortgage rates will tighten, which will help drive rates lower. However, there’s no guarantee that rates will drop, which could make waiting a risky bet.

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