Thankfully, mortgage rates fail to launch

Mortgage rates snoozed for the holiday week, but don't let the calm before the storm fool you. Just because rates have hovered near the bottom longer than expected doesn't mean they will stay low indefinitely, some mortgage analysts say.

30 year fixed rate mortgage 3 month trend
  • The benchmark 30-year fixed-rate mortgage stayed at 4.28 percent, according to the national survey of large lenders. One year ago, that rate was 4.48 percent. Four weeks ago, it was 4.32 percent. The mortgages in this week's survey had an average total of 0.34 discount and origination points.
  • The benchmark 15-year fixed-rate mortgage rose to 3.4 percent from 3.39 percent last week.
  • The benchmark 5/1 adjustable-rate mortgage was 3.33 percent, unchanged from last week.
  • The benchmark 30-year fixed-rate jumbo fell to 4.29 percent from 4.31 percent.

Weekly national mortgage survey

Results of's July 2, 2014, 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:N/C+0.01N/C
Monthly payment:$814.60$1,171.47$725.35
Change from last week:N/C+$0.81N/C

Rates will be low forever -- not!

Rates have stayed in a tight range for several weeks. That's great news for those hoping to grab a low mortgage rate, but borrowers shouldn't get complacent, says Brian Koss, executive vice president of Mortgage Network in Danvers, Massachusetts.

"We like it when rates are predictable, although it gives people a false sense of security," he says. "When rates move, they move very quickly, so one of the negative things is it is keeping people on the fence. They think, 'What's the rush?'"

That might have been the mentality last year when mortgage rates suddenly jumped a full percentage point and many borrowers were caught by surprise.

Koss says consumers should lock in a rate as soon as they are comfortable with the quote they are given.

"If the numbers work for you today, lock it in, take your money and move on," he says. "Rates could be coiling like a spring."

Several factors could cause rates to move quickly, he says, including improvements in hiring and numerous global economy factors.

Jobs report

The closely watched monthly employment report that will be released by the Labor Department this week could make rates volatile in coming days, depending on how investors interpret the numbers.

One report released Wednesday shows that private companies added more jobs in June than economists had expected. ADP's June employment report shows private payrolls added 281,000 jobs last month. If the Bureau of Labor Statistics report shows similar growth, rates could rise.

"Hiring is strengthening and that, more than anything else, is pointing to much better growth ahead," says Joel Naroff, president and chief economist for Naroff Economic Advisors.

Wait it out

If rates start to rise after the employment report is released Thursday, borrowers might choose to wait for the dust to settle, says Michael Becker, a mortgage banker for WCS Funding Group in Baltimore.

"Any volatility that occurs in interest rates the day of the jobs report usually goes back around three to five days later," Becker says.

Although rates are volatile to market movements and global economic events, lately they have been driven mainly by the Fed, he says. The Fed is doing everything in its power to keep rates low. But eventually, when investors sense that the Fed is preparing to raise the federal funds rate, expect mortgage rates to rise, he explains.

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