Current market rates

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The average 30-year fixed-rate mortgage (FRM) and 15-year fixed-rate mortgage (FRM) rates remained about the same during the week ending July 18, 2014. The 30-year FRM rate averaged 4.11% and the 15-year FRM rate averaged 3.20%.  Looking forward, FRM rates are expected to remain around their current level for several months, then increase with bond rates in anticipation of rising short-term interest rates engineered by the Federal Reserve, likely in 2015.

The 10-year Treasury Note rate remains relatively low today, closing at 2.54% as of June 26, 2014. The 10-year rate historically runs closer to 4% during a stable money market. The difference between the 30-year FRM rate and the 10-year Treasury Note was 1.58% at the end of June, above the historical spread of 1.4%. This indicates homebuyers are overpaying for mortgages.

The monthly rates used to set adjustable rate mortgages (ARMs) displayed mixed signals in June 2014. The 12-month Treasury average, the London inter-bank offered rate (LIBOR) and the applicable federal rates decreased slightly. The 3-month and 6-month Treasury bills increased.

As of June 2014, the average ARM rate decreased to 2.79%, still above its low point in May 2013. ARM rates will rise when the Federal Reserve raises key interest rates. ARM use has already risen due to home prices rising faster than the rate of inflation (driven by speculation) and buyers taking on risk to extend their purchasing power.

Click the link to go directly to a chart, or browse the charts by scrolling below.
1. 30-year fixed rate mortgage (FRM) rate, weekly — Chart update 07/17/14
2. 30-year FRM rate, monthly — Chart update 06/26/14
3. 15-year FRM rate — Chart update 07/17/14
4. 5/1 adjustable rate mortgage (ARM) rate — Chart update 06/26/14
5. 10-year Treasury note rate — Chart update 06/26/14
6. Combined FRM and 10-year Treasury note rates — Chart update 07/03/14
7. 91-day Treasury bill rate — Chart update 06/26/14
8. 3-month Treasury bill — Chart update 07/10/14
9. 6-month Treasury bill — Chart update 07/10/14
10. Treasury Securities average yield — Chart update 05/01/14
11. 12-month Treasury average — Chart update 07/10/14
12. Cost of Funds Index — Chart update 06/26/14
13. London Inter-Bank Offered rate (LIBOR) — Chart update 06/26/14
16. Applicable federal rates — Chart update 07/03/14
17. Private lender section 32 Reg-Z loans — Chart update 07/10/14

Average 30-Year Conventional Commitment Rate

Avg30yrFRMwest

Chart update 07/17/14

Current
7/17/14
4.11%

Month ago
6/19/14
4.13%
Year ago
7/18/13
4.33%
The average 30-year commitment rate is the rate at which a lender commits to lend mortgage money in the United States-West as reported by Freddie Mac. The western region includes CA, AZ, NV, OR, WA, UT, ID, MT, HI, AK, and GU. More information is available on Freddie Mac’s Primary Mortgage Market Survey report.

Average 30-Year Conventional Commitment Rate: 1991-present

Avg30yrFRm

Chart update 06/26/14
June 2014
Average
4.13%
May 2014
Average
4.15%
June 2013
Average
4.06%

Average 15-Year Conventional Commitment Rate

Avg15yrFRM
Chart update 07/17/14
Current
7/17/14
3.20%
Month ago
6/19/14
3.23%
Year ago
7/18/13
3.35%
The average 15-year commitment rate is the rate at which a lender commits to lend mortgage money in the United States-West as reported by Freddie Mac. More information is available on Freddie Mac’s Primary Mortgage Market Survey report.

5/1 Adjustable Rate Mortgage (ARM) Average Rate

AvgARMrate
Chart update 06/26/14
June 2014
2.79%
May 2014
2.83%
June 2013
2.70%
The 5/1 average adjustable rate mortgage (ARM) rate shows the average rate for the first five years after origination, as reported by Freddie Mac. After the initial five-year period, the ARM rate is adjusted annually based on an index figure, such as a certain Treasury Bill rate (which reflects Federal Reserve rate movements) or the London Inter-Bank Offered Rate (LIBOR).

10-Year T-Notes – Average Market Yield

10-year
Chart update 06/26/14
Current
6/26/14
2.53%
Month ago
5/29/14
2.46%
Year ago
6/27/13
2.47%
This rate is a leading indicator of the direction of future Freddie Mac rates. The 10-year rate historically runs closer to 4% during a stable money market. The rate is influence by worldwide demand for the dollar and anticipated future domestic inflation.

Combined Average 15-, 30-Year Conventional Rates and 10-Year Treasury Note Average

ComboRates

Chart update 07/03/14
Avg 15-Year
June 2014
3.21%
Avg 30-Year
June 2014
4.13%
10-Year Treasury Note Avg
June 2014
2.59%
The average 15- and 30-year conventional commitment rates are the rates at which a lender commits to lend mortgage money in the United States-West for the duration of the life of each respective loan as reported by Freddie Mac. More information is available on Freddie Mac’s Primary Mortgage Market Survey report. The green line reflects the 10-Year Treasury Note Average, a leading indicator of the direction of future Freddie Mac rates. It is comprised of the level of world-wide demand for the dollar and anticipated future domestic inflation.

91-Day Treasury Bill – Average Auction Rate

91-day

Chart update 06/26/14
Current
6/26/14
0.025%
Month Ago
5/29/14
0.03%
Year Ago
6/27/13
0.06%
This rate determines the minimum interest rate the seller must use in a delayed §1031 transaction and report when not receiving interest on §1031 monies held by a facilitator/accommodator. This rate also sets the amount of the ordinary income the facilitator/accommodator must report.

3-Month Treasury Bill

3moTbill

Chart update 07/10/14
June 2014
0.04%
May 2014
0.03%
June 2013
0.05%
The 3-Month Treasury Bill is the rate managed by the Federal Reserve through the Fed Funds Rate as the base price of borrowing money in the short-term. It is used in determining the yield spread, which predicts the likelihood of a recession one year forward. The posted rate is the monthly average for the listed month. Rates are released with a 1-2 month reporting delay. [See the first tuesday article, Using the yield spread to forecast recessions.]

6-Month Treasury Bill

6moTbill

Chart update 07/10/14
June 2014
0.06%
May 2014
0.05%
June 2013
0.09%

The six-month T-Bill rate is one of several indices used by lenders to periodically adjust the adjustable rate mortgage (ARM) rate. The adjusted rate equals the indexed rate (at the time of adjustment or an average of several prior rates) plus the lender’s profit margin. The posted rate is the monthly average for the listed month. Rates are released with a 1-2 month reporting delay.

Treasury Securities Average Yield — 1-Year Constant Maturity

TSecuritiesAvg

Chart update 05/01/14
Apr 2014
0.11%
Mar 2014
0.13%
Apr 2013
0.12%
This index is one of several indexes used by lenders as stated in their ARM note to periodically adjust the note’s interest rate.The ARM interest rate equals T-Bill yield, plus the lender’s profit margin. The index is an average of T-Bill yields with maturities adjusted to one year.

12-Month Treasury Average

12moTbill

Chart update 07/10/14
June 2014
0.118%
May 2014
0.122%
June 2013
0.159%
This index is one of several indexes used by lenders as stated in their ARM note to periodically adjust the note’s interest rate. This figure is an average of the one-year T-Bill rates for the past 12 months.The ARM interest rate equals the 12-Month Treasury Average yield plus the lender’s profit margin. There is a one-two month lag in data reporting for the 12-Month Treasury Average.

Cost of Funds Index (COFI) (11th FHLBB District)

CostofFunds

Chart update 06/26/14
June 2014
0.682%
May 2014
0.701%
June 2013
0.97%
This index is one of several indexes used by lenders to periodically adjust the interest rate on an ARM note. The ARM interest rate equals Cost of Funds Index, plus the lender’s profit margin. Current index reflects the cost of funds two months’ prior in the United States-West. More information is available on the Federal Home Loan Bank of San Francisco Cost of Fund’s Index page.

London Inter-Bank Offered Rate

LIBOR

Chart update 06/26/14
1 Month
0.15%
6 Month
0.33%
1 Year
0.55%
This index is one of several indexes used by lenders as stated in their ARM note to periodically adjust the note’s interest rate.The ARM interest rate equals the LIBOR rate plus the lender’s profit margin. The rate is set by the banks in London, England.

Applicable Federal Rates

AppFedRates

Chart update 07/03/2014
Short (3 years or less)
July 2014
0.31%
Medium (3 to 9 years)
July 2014
1.40%
Long (9+ years)
July 2014
3.02%
These rates determine minimum interest yield reportable on carryback financing. The AFR category is determined by the carryback due date. *Rates are for monthly payments. More information on AFRs on other payment periods can be found on the Internal Revenue Service Applicable Federal Rates page.

Rate Analysis for Private Lender Section 32 Reg-Z Loans

Chart update 07/10/14

Month* 6-Month 1-Year 2-Year 3-Year 5-Year 7-Year
June 2014 0.06% 0.10% 0.45% 0.90% 1.68% 2.19%
On junior trust deed loans, a margin of 5 – 8% points is added to the Index Figure (Cost-of-Funds Rate) for the maturity date of a Treasury bill equal in length to the payoff date of the loan to set the Section 32 threshold for term limitations. With this in mind, if the percentage of the total loan amount represented by points and fees is greater than the applicable Federal Securities Rate plus ten percentage points, additional disclosures, limitations and prohibitions are triggered by Regulation Z (Reg-Z) Section 32. [For more information, please reference the June 2008 first tuesday articles, Regulation Z Controlled Lending and Brokering Cal-32 High-Cost Loans. first tuesday students can also access first tuesday Form 223-1, Points and Fees Test, and first tuesday Form 223-1, Supplemental Truth-in-Lending Section 32 Disclosure, available on the Forms-on-CD 4.3 and Online Library. (Not a first tuesday student? Click here and enroll in any course for one-year's access to all books and materials published by first tuesday.)]

*Rate information gathered from:
The Federal Reserve Board
Federal Reserve Bank of San Francisco
Federal Reserve Bank of St. Louis
The Bureau of Labor Statistics
Federal Home Loan Bank of San Francisco
Federal Home Loan Mortgage Corporation (Freddie Mac)
Federal National Mortgage Association (Fannie Mae)
U.S. Department of Labor
U.S. Department of the Treasury
Internal Revenue Service

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