Monday, March 2, 2015

Yellen, Greece push mortgage rates down

Donna Antonucci mortgage rates hoboken real estate

Courtesy of Bankrate Monitor.

Mortgage rates eased this week as the Fed signaled to investors that it is not ready to raise interest rates just yet.
2014%30-year fixedDecJanFeb3.703.803.904.004.10
30 year fixed rate mortgage -- 3 month trend
  • The benchmark 30-year fixed-rate mortgage fell to 3.9 from 3.96 percent last week, according to the national survey of large lenders. One year ago, that rate was 4.48 percent. Four weeks ago, it was 3.8 percent. The mortgages in this week's survey had an average total of 0.3 discount and origination points. Over the past 52 weeks, the 30-year fixed has averaged 4.2 percent. This week's rate is 0.3 percentage points lower than that 52-week average.
  • The benchmark 15-year fixed-rate mortgage fell to 3.15 percent from 3.21 percent.
  • The benchmark 5/1 adjustable-rate mortgage fell to 3.22 percent from 3.31 percent.
  • The benchmark 30-year fixed-rate jumbo fell to 4.07 percent from 4.11 percent.

Weekly national mortgage survey

Results of's Feb. 25, 2015, weekly national survey of large lenders and the effect on monthly payments for a $165,000 loan:

30-year fixed15-year fixed5-year ARM
This week's rate:
Change from last week:-0.06-0.06-0.09
Monthly payment:$778.25$1,151.40$715.38
Change from last week:-$5.69-$4.80-$8.16

Thanks, Yellen!

The latest drop in rates came as somewhat of a surprise to those who had been watching rates rise in the past two weeks.

"I was shocked," says Michael Becker, branch manager at Sierra Pacific Mortgage in White Marsh, Maryland. Rates dropped as soon as Fed Chair Janet Yellen indicated in her testimony that the central bank is not likely to raise rates in June, Becker explains. "Yields across the world got better."

Investors had been expecting the Fed to raise the federal funds rate in June, but Yellen told U.S. lawmakers that the Fed is not in a rush to raise rates.

"The FOMC's assessment that it can be patient in beginning to normalize policy means that the committee considers it unlikely that economic conditions will warrant an increase in the target range for the federal funds rate for at least the next couple of FOMC meetings," Yellen said in prepared remarks to a Senate Banking Committee.

The Greeks are helping, too

This reassurance, coupled with the global economic concerns -- including the Greek crisis – signaled that investors should keep a lid on rates for now, Becker says.
"I think there are a lot of speed bumps still," he says, adding that rates could drop even lower. "I don't know if they will get to all-time lows, but they might drop some more."

Borrowers can wait, but they shouldn't

Does that mean you should wait for rates to drop before you lock a rate? Not really, says Norman Koenigsberg, president and CEO of First Choice Loan Services.

"If consumers are happy with rates where they are, they shouldn't gamble with it," he says.
But if you are still searching for a home to buy, don't lose sleep over rates rising. Koenigsberg doesn't seem worried about rates spiking anytime soon. Rates may even stay low until next year's election, he says.

"I would be surprised if we saw conforming 30-year fixed rates in excess of 4.5 percent through the election," he adds.