Mortgage Rates Trending Higher in 2014

Graph of 30-year fixed mortgage rates

(Best Syndication News) Interest rates have been trending higher over the last year; according to data collected by Best Syndication (see the charts below). On December 31st 2012, the average national interest rate was 3.428 percent. Today, the average overall rate is 4.375 percent.

Rates across the board were higher. The average FHA, VA, and Adjustable Rate Mortgage (ARM) rates were all higher. Although mortgage interest rates dropped slightly Monday, the weekly trend was higher. Stocks were also higher over the last year as the Federal Reserve continued their easing practices.

The 10-year note yield, a common benchmark for the 30-year fixed rate mortgage (FRM), fell three basis points (bps) to 2.99 percent, according to data provided by the U.S. Treasury Department. Last year, the 10-year note yield was much lower at 1.78 percent.

The Fannie Mae require net yield (RNY) rate was also higher. The FNMA 30-year 30-day RNY jumped from 2.847 percent in 2012 to 4.165 percent (YoY). The 6-month LIBOR fell from 0.50825 percent to 0.3485 percent.

Mortgage interest rates are very dependant on external forces. Banks compete in the capital markets where investors are considering the relatively safe mortgage backed securities and even safer government backed bonds.

The 30-year fixed rate mortgage at Wells Fargo jumped from 3.67 percent in 2012 to 4.71 percent in 2013 (YoY). JPMorgan Chase also raised their rate from 3.47 percent last December to 4.63 percent this December. There was a similar trend at Bank of America.

Analysts believe interest rates will rise. Downward pressure has kept mortgages lower over the last few years, but that could change. Recent moves by the Federal Reserve could relieve some of that pressure. The Central Bank has begun to taper their bond-buying program ever-so-slightly from $85 billion to $75 billion per month. Wall Street reacted well to the change, but this could affect competition in the secondary lending market.

By: John Waters
Business Reporter

Mortgage Rate Charts:

Best Syndication News Mortgage Survey
Monday 1 Day 5 Day 30 Day 100-Day 100-Day
12/30/13 National Average APR* Point Ch. Point Ch. Point Ch. Point Ch. High
4.375% Average 30 yr fixed -1 2 19 11 4.49%
4.901% Average 30 yr FHA 0 7 15 6 5.09%
4.217% Average 30-yr VA -4 4 16 -3 4.40%
3.556% Average 15 year FRM -1 2 16 12 3.60%
3.224% Average 5/1 ARM 0 4 12 -1 3.30%
4.519% 30 Yr Fixed Jumbo 0 5 17 2 4.81%
3.846% 15 Yr Fixed Jumbo 0 4 12 9 3.99%

Benchmark Chart:

Monday 1 Day 5 Day 30 Day 100-Day 100-Day
12/30/13 Benchmark Point Ch. Point Ch. Point Ch. Point Ch. High
3.250 Prime Rate 0 0 0 0 3.25
4.73 Bond Buyer's 20-yr bond index 0 -1 25 -4 5.03
3.05% FHLMC 30 yr 30 days RNY 0 0 0 0 0.0305
3.08 FHLMC 30 yr 60 days RNY 0 0 0 0 3.08
4.165 FNMA 30 yr 30 days RNY -4 -1 22 2 4.35
4.218 FNMA 30 yr 60 days RNY -4 -1 24 2 4.396
0.1702 1 Month LIBOR Rate 0 1 0 -2 0.18603
0.2466 3 Month LIBOR Rate 0 0 1 -2 0.2666
0.3485 6 Month LIBOR Rate 0 0 -1 -5 0.3965
0.5831 1 Year LIBOR Rate 0 0 -1 -9 0.6756
2 Call Money 0 0 0 0 2
3.66 20-year Note Yield Rate * -4 9 12 27 3.7
2.99 10-year Note Yield Rate * -3 10 24 36 3.02
0.13 1-year Note Yield Rate * 1 0 0 2 0.16
0.07 3-month Note Yield Rate * 0 0 -1 3 0.14
0.96% 11th District Cost of Funds 0 0 0 0 0.00963
3.590 Difference 3-mo & 20 yr ** -4 9 13 24 3.63
1.385 Difference 10yr Note 30yr Loan 2 -8 -5 -25 1.6649615
* Treasury Yields - DAILY
** Pos change - economy to improve soon (probit model)

Yearly Trend Charts:

Benchmark
11/30/2011 12/31/12 12/30/13
Prime Rate 3.250 3.250 3.250
Bond Buyer's 20-yr bond index 4.07 3.64 4.73
FHLMC 30 yr 30 days RNY 3.55 2.83 3.05%
FHLMC 30 yr 60 days RNY 3.59 2.87 3.08
FNMA 30 yr 30 days RNY 3.577 2.847 4.165
FNMA 30 yr 60 days RNY 3.622 2.876 4.218
1 Month LIBOR Rate 0.27144 0.2087 0.1702
3 Month LIBOR Rate 0.52889 0.306 0.2466
6 Month LIBOR Rate 0.74833 0.50825 0.3485
1 Year LIBOR Rate 1.07106 0.8435 0.5831
Call Money 2 2 2
20-year Note Yield Rate * 2.77 2.54 3.66
10-year Note Yield Rate * 2.08 1.78 2.99
1-year Note Yield Rate * 0.12 0.16 0.13
3-month Note Yield Rate * 0.01 0.05 0.07
11th District Cost of Funds 1.218 1 0.96%
Difference 3-mo & 20 yr ** 2.760 2.490 3.590
Difference 10yr Note 30yr Loan 1.953 1.648 1.385
* Treasury Yields - DAILY
** Pos change - economy to improve soon (probit model)

Year Trend for Mortgage Rates:

Best Syndication News Mortgage Survey
Wednesday Monday Monday
National Average APR* 11/30/11 12/31/12 12/30/13
Average 30 yr fixed 4.033% 3.428% 4.375%
Average 30 yr FHA 4.670% 3.928% 4.901%
Average 30-yr VA 4.328% 3.698% 4.217%
Average 15 year FRM 3.532% 2.932% 3.556%
Average 5/1 ARM 3.186% 3.050% 3.224%
30 Yr Fixed Jumbo 4.528% 3.878% 4.519%
15 Yr Fixed Jumbo 3.797% 3.039% 3.846%

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