Mortgage rates showed marginally improvements to close out the last week of March. The reduction in home loan rates and loan costs was relatively mild but was seen on all major loan products in the SelectCDrates.com weekly bank mortgage rate survey. The weekly trading session for mortgage bond and Treasury bonds was shortened due to the Good Friday holiday.
There were a few factors impacting the price of mortgage bonds and the mortgage rates tied to the bonds, over the week. Mortgage bonds or mortgage backed security prices affect mortgage rates which move in the opposite direction, if mortgage bond prices rise, mortgages rates move lower and vice versa. The three factors influencing rates are the fear about banking problems in Cyprus and whether that problem will remain contained, the lack of economic growth in Europe and questionable growth in China and finally the continued monetary easing policy put in place by the Fed.
While the trouble in Cyprus has become one of the most severe banking problems that have arisen out of the world wide recession, it is not likely that the problem will spread beyond Cyprus and Cyprus itself is sooooo small that its issues will not cause a calamity. One very odd question, unrelated to bond rates and prices, is who is going to get hurt the most based on the current EU solution to the Cyprus banking problem. At the current time, the solution calls for all deposits over 100,000 Euros to get a haircut with a percentage kept on account and a percentage converted into bank stock. Perhaps not the end of the world unless you have a few hundred thousand Euros in the bank.
Slow world growth is hard to measure. Europe is more important to the US than China, regardless of what the media thinks. The economic numbers regarding trade and production are not even close. However, the US economy survived while the economy in Japan went into hibernation for several years perhaps we will survive while Europe simply muddles along. The big question in world growth is how China is progressing.
The numbers out of China are suspect, unreliable, pretty much worthless. And most managed economies get hurt at some point. Trying to direct the activities of a billion people and several trillion dollars in production is near impossible without some hick ups. China is not a free economy with extensive regulations on capital, investments, production and wide spread corruption. If the Chinese economy starts moving in the wrong direction, all bets are off on where interest rates are headed. Even though, slow growth generally favors low rates.
As the end of March faded away, the 30 year fixed rate mortgage slipped lower by 3.1 basis points for the four days ending March 28, 2013. One basis point is equal to 1/100th of a percent. The average 30 year mortgage rate in the weekly bank mortgage rate survey closed the week at 3.650 percent after drifting down to 3.681 percent in the prior week.
FHA mortgage rates were down by a like amount, falling by 3.5 basis points for the week. The average rate found on the 30 year FHA mortgage rate reached 3.465 percent after closing at 3.500 percent in the previous two weeks.
30 year jumbo mortgage rates displayed a slightly more aggressive downside move, tumbling 5.0 basis points for the week. The average rate found on the 30 year jumbo mortgage dropped to 3.803 percent after closing at 3.853 percent in the week earlier.
The ten tear mortgage rate, 20 year mortgage rate and 15 year mortgage rate were all down on the week with the smallest decline coming from the 10 year home loan with a drop of less than one basis point and the greatest drop coming from the 20 year term home loans which were cheaper in the week by 6.8 basis points.
To review the latest mortgage rates and loan costs from the top bank mortgage lenders in this week’s bank mortgage rate survey dated March 29, 2013 see the following mortgage rate tables: 30 year mortgage rates, 15 year mortgage rates, 20 year mortgage rates, 10 year mortgage rates, FHA mortgage rates and jumbo mortgage rates.
The SelectCDrates.com weekly bank mortgage rate survey calculates the average rate offered on a variety of home loan products from the nations’ largest bank mortgage lenders including the mortgage rates of Wells Fargo Bank, Chase Bank mortgage rates, Citibank home loan rates, US Bank rates, HSBC Bank, Fifth Third Bank, SunTrust Bank, BB&T Bank and others.