Mortgage Rates For March 4, 2024: What is the Bond Market and Why Does it Affect Mortgage Rates?

Bonds issued by the government affect mortgage rates – but how and why do they do that? If you’re looking at daily average mortgage interest rates, it’s vital for you to understand the major factors affecting the rates you might be offered. One big factor is government bonds. Let’s take a look at how and why bonds affect interest rates for homebuyers.  

Today’s 30-year mortgage interest rates

The average daily mortgage interest rate for Monday March 4, 2024 is 7.09% for a 30 year fixed rate. The rate rose 0.01% from yesterday and rose 0.17% from February 2023. This information is sourced daily from correspondent, retail, and wholesale lenders located in the United States.

Lenders in the freerateupdate.com network are currently offering rates as low as 6.0% (6.2% APR) on a 30-year fixed-rate mortgage. Receive a rate up to 0.87% lower than today’s average 30-year mortgage rate if you qualify. ⓘ

Today’s 15-year mortgage interest rates

The average daily mortgage interest rate for March 4, 2024 is 6.58% for a 15 year fixed rate. The rate rose 0.01% from yesterday and rose 0.33% from February 2023. This information is sourced daily from correspondent, retail, and wholesale lenders located in the United States.

Lenders in the freerateupdate.com network are currently offering rates as low as 5.0% (5.3% APR) on a 15-year fixed-rate mortgage. Receive a rate up to 1.29% lower than today’s average 15-year mortgage rate if you qualify. ⓘ

What are United States government bonds?

A corporate entity, individual person, or other business can purchase government bonds. When they do that, they hand money over to the government in exchange for the bond. When they cash the bond in after it matures, they receive interest. 

Essentially, when you’re investing in government bonds, you’re lending money to the government. When people talk about “bonds,” they’re usually referring to bonds issued by the federal government. However, state and local governments also issue bonds to raise money for specific projects and initiatives. The bonds that affect mortgage rates are federal bonds, so they’re the ones you want to keep your eye on if you’re concerned with interest rates. 

Since the federal government is a trustworthy entity to lend money to, most people view bonds as extremely safe investments and a tried and true way to earn interest. 

The government issues two types of bonds: EE Bonds and I Bonds. The investor gets interest when those bonds mature, plus the investment they originally put in. These bonds are popular because they start at just $25, so almost anyone can buy them.  

Treasury Bonds and daily average mortgage interest rates

Banks, credit unions, and other lenders are concerned with the 5-year bond yield. Using that info, they make decisions about rates on fixed-rate mortgages and other general loans. Financial institutions also add “risk premium,” or the padding between the bond rate and mortgage interest rate. Risk premiums are usually 1-2%. 

The relationship between bonds and mortgage interest rates is inverse. When bond prices go down, interest rates rise, and vice versa. Note that this is only important for fixed-rate loans and may not affect other loan types. 

Ready to make your move when it comes to home ownership? Keep your eye on Treasury bond rate changes, as they affect daily average mortgage rates.