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Mortgage Rates Wednesday, July 5: Fed Plans Rock Rates

Finding the Right Mortgage, Mortgage Rates, Mortgages
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Mortgage interest rates for 30-year and 15-year fixed loans, as well as 5/1 ARMs, all moved higher again today, according to a NerdWallet survey of mortgage interest rates published by national lenders Wednesday morning.

Government bond yields — such as 10-year Treasurys, which often mirror mortgage rates — have risen on market expectations regarding the Federal Reserve’s “normalization plan,” according to Richard Turnill, global chief investment strategist for BlackRock. The Fed has announced its intention to sell off major stakes in Treasurys and mortgage-backed securities in the coming months, and that’s causing bond prices to sag — and yields to rise.

In an analysis released Monday, Turnill said that even Friday’s employment report, which is expected to be upbeat, is “unlikely to slow” the Fed’s latest monetary strategy.

A positive jobs report, combined with the Fed’s reduction in bond holdings, could put pressure on mortgage rates to continue moving higher.

Fixed-rate mortgages are at their highest point since mid-May, while normally docile adjustable-rate loans are their highest since March 21, according to the NerdWallet Mortgage Rate Index.


(Change from 7/3)
30-year fixed: 4.16% APR (+0.04)
15-year fixed: 3.55% APR (+0.03)
5/1 ARM: 3.92% APR (+0.03)

NerdWallet daily mortgage rates are an average of the published annual percentage rate with the lowest points for each loan term offered by a sampling of major national lenders. APR quotes reflect an interest rate plus points, fees and other expenses, providing the most accurate view of the costs a borrower might pay.

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Hal Bundrick is a staff writer at NerdWallet, a personal finance website. Email: Twitter: @halmbundrick.