Thirty-year fixed, 15-year fixed and 5/1 ARM rates all notched higher today, according to a NerdWallet survey of mortgage rates published by national lenders Friday morning.
The Fed funds futures trend indicates that Wall Street is expecting a hike of short-term interest rates by the Federal Reserve at its meeting March 15. The futures market is where institutional investors can hedge everything from lumber to live cattle.
“By now a March rate hike is nearly fully priced into the market,” Rob Chrisman, a mortgage banking consultant, wrote today in his daily email update to subscribers. “At least, if anyone is paying attention to what all the Fed officials are saying in their speeches, it should be. In the last 48 hours, we’ve had additional comments by [Fed governors Lael Brainard and Jay Powell] expressing support for a 25-basis point rate hike at the March meeting.”
The last Fed interest rate hike was in December.
Millennial home buyers are moving into the housing market, and in no small way. In January, adults born from 1980 to 1999 accounted for 84% of loans closed for new home purchases, according to Ellie Mae. And, considering all loan types, the average FICO credit score to make a move into homeownership for these young adults was 724.
Although it has a quasi-governmental-sounding name, Ellie Mae is a private company providing mortgage-processing solutions to lenders.
For conventional loans on millennial home purchases, the average FICO score was 748 in January. But FHA and VA borrowers get a break on credit scores, and average FICO scores for the month were 690 for FHA loans and 734 for VA mortgages.
The Ellie Mae report found that 35% of all loans to millennials in January were FHA-backed.
» MORE: Best lenders for FHA loans
“As the purchase market heats up, we will continue to watch the FHA purchase trend amongst millennials,” Joe Tyrrell, executive vice president for Ellie Mae, said in a release. “It is not surprising to see millennial borrowers leverage FHA loans, because they typically offer lower down payments and lower average FICO score requirements than conventional loans.”
Homeowners looking to lower their mortgage rate can shop for refinance lenders here.
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.
The article Mortgage Rates Friday, March 3: Slightly Higher; The Average Credit Score of Millennial Home Buyers originally appeared on NerdWallet.