May 2021 mortgage rates are starting at lower levels then we’ve previously seen. From February to March mortgage rates moved higher on worries that inflation was going to be rampant.

Those fears seem to be subsiding and as a result both bond yields and mortgage rates have moved lower. The first bit of economic news that might impact May 2021 mortgage rates in the jobs report (due on May 7th).

While a different report, weekly jobless claims and continued claims remain high which is concerning for the economy as more and more people (and businesses) get back to “normal”.

May 2021 mortgage rates will most likely fluctuate throughout the month and we suggest not hesitating to lock in your rate/terms. It’s impossible to guess what will happen and mortgage rates could easily move higher if inflation fears return.

Opportunities And Risks For May 2021

Opportunities for May 2021 mortgage rates to move significantly lower will remain dependent on economic data and outlook.

If one had to guess, it’s unlikely you will see a significant move down in mortgage rates from levels we’re seeing at the beginning of the month.

The risk to May 2021 mortgage rates is that inflation starts to get out of control and the market (specifically the bond market) begins to panic. Keep in mind this fact, trillions of dollars have been injected into the economy and that can be inflationary and inflation is bad for mortgage rates.

May 2021 Mortgage Rate Forecast For California

Here are our latest May 2021 mortgage rate forecasts for California:

30-year fixed rates below 3.125%
20-year fixed rates below 2.875%
15-year fixed rates below 2.50%

This is based on properties in California, a loan amount of $350,000, a primary home, excellent credit (740 or higher credit score), and a Loan-To-Value ratio below 60% (purchase transactions).

We may see days in which mortgage rates spike higher however overall we believe there will be opportunities to lock a mortgage rate at or below these levels throughout the month of May.

Mortgage Rate And Payment Chart

Here is a quick reference guide to May 2021 mortgage rate possibilities in California (these are not quotes; just examples) and the payments associated with each level based on various conforming loan amounts. See our important disclosure below.

30-Year Fixed-Rate Mortgage:

Term	Loan Amount	Mortgage Rate	Payment
30-year fixed	$225,000	2.625%	$903.71
30-year fixed	$325,000	2.625%	$1,305.36
30-year fixed	$425,000	2.625%	$1,707.01
30-year fixed	$525,000	2.625%	$2,108.67

20-Year Fixed-Rate Mortgage:

Term	Loan Amount	Mortgage Rate	Payment
20-year fixed	$225,000	2.375%	$1,178.63
20-year fixed	$325,000	2.375%	$1,702.46
20-year fixed	$425,000	2.375%	$2,226.30
20-year fixed	$525,000	2.375%	$2,750.13

15-Year Fixed-Rate Mortgage:

Term	Loan Amount	Mortgage Rate	Payment
15-year fixed	$225,000	2.00%	$1,447.89
15-year fixed	$325,000	2.00%	$2,091.40
15-year fixed	$425,000	2.00%	$2,734.91
15-year fixed	$525,000	2.00%	$3,378.42

Important Disclosure For May 2021 mortgage rates: The above is not a mortgage rate quote; nor is it an offer to lend. It’s only a generic example of various mortgage rates, loan amounts, and payments. Our mortgage rate chart is meant to educate and inform our readers. The current May 2021 mortgage rate market may be higher or lower than the examples listed in these mortgage rate charts. Also; mortgage rates can and often do adjust multiple times a day.

California Mortgage Calculator

Using a mortgage calculator to figure out your monthly payment is an essential part of buying a home in California or refinancing a current mortgage. Use our free mortgage calculator to help you determine what you can afford.

With our online mortgage calculator, you can also factor in your property tax amount along with your annual homeowner’s insurance amount with your monthly mortgage payment.

Our California mortgage calculator is free and easy to use.

And our mortgage calculator is especially helpful for those who want to impound their property taxes and property insurance into their monthly mortgage payment. If you have any questions about or California mortgage calculator please don’t hesitate to ask.

May 2021 Mortgage Rate FAQ’s

Here we answer some popular questions about mortgage rates in California. The section will be updated as more questions roll in.

Can I Get A Second Mortgage If I’m Buying A Home?

Yes!

You can get a second mortgage in you’re buying a home and there are two main options. A Home Equity Line of Credit or a Fixed Rate Second mortgage.

The benefits of a Home Equity Line of Credit (HELOC) are that as you pay down the loan you can re-access the credit line if you need funds. Also, your monthly payment is typically an interest-only payment (which is lower than a principal and interest payment). Also, HELOC rates are usually lower than fixed-rate second mortgage rates.

The downside is that your rate can adjust monthly and there usually is an annual fee tied to the HELOC.

The benefit of a fixed rate second mortgage is that the rate and the monthly payment never change. Also with each payment you are paying down the principal loan amount.

There is no annual fee with a fixed rate second mortgage.

The downside is that your rate and your monthly payment are going to be higher than a HELOC monthly payment.

What Mortgage Loan Is Right For Me?

Deciding what mortgage loan is right for you can difficult since everyone’s financial situation and financial goals are different.

The good news is that we have a page dedicated to helping you decide which mortgage loan is better: a 30-year fixed-rate mortgage, 15-year fixed-rate mortgage or another type?

What Are The Conforming Loan Limits In California?

The baseline 2021 Conforming Loan Limit In California is $548,250 and in some high-cost counties like Los Angeles, and Santa Clara it’s $822,375.

So to obtain a low rate conforming loan make sure your loan amount is at or below the $548,250 limit (or if you live in a high-cost county then your high-cost county limit).

If you go above this limit your loan will be considered a jumbo mortgage loan.

Update Mortgage Guidelines May 2021

Heading into the month of May guidelines remain the same and if anything new comes out we’ll update this section.

Economic Calendar For May 2021

Here we cover the daily economic events that might impact mortgage rates. After the report comes out we’ll update the post with that information and comment on if there is a potential impact on the Mortgage-Backed Securities market and consumer mortgage rates.

To start things off we have:

ISM Manufacturing report
ADP Employment (sometimes comes out the day before the 1st of the month)
ISM Non-Manufacturing PMI
BLS Employment report

Friday – May 28th:

Core PCE: The Core PCE inflation report came in at 3.1% after last month’s report of 1.8%.
Chicago PMI: Last month the Chicago PMI report came in at 72.1 and this month it came in at 75.2

Thursday – May 27th:

Weekly Jobless Claims: The weekly jobless claims came in better than expected (406k vs 425k). Continued claims in at 3,642,000.00.

Wednesday – May 26th:

MBA Purchase and MBA Refinance Index: The MBA Purchase Index increased this week, from 265.3 to 269.8. The MBA Refinance Index decreased from 3413.3 to 3168.8.

Friday – May 26th:

Core PCE: This month’s Core PCE came in much higher than last month (1.8% vs 3.1%).
Chicago PMI: Like the Core PCE report, the Chicago PMI report came in higher when compared to last month’s report (72.1 vs 75.2).

Tuesday – May 25th:

Monthly Home Prices: The Monthly Home Price report showed prices have increased 13.3% over the last 12 months.
Consumer Confidence: The Consumer Confidence report came in weaker than expected (117.2).
New Home Sales: The New Home Sales report revealed a troubling sign that buyers are losing interest in purchasing a new home. Last month the report came in at 1,021,000 units (annual rate) and this month it came in at 863,000 units (annual rate).

Thursday – May 20th:

Weekly Jobless Claims: The weekly jobless claims came in better than expected (444k vs 473k). Continued claims in at 3,751,000.00.
Philly Fed Business Index: Last month the report came in at 50.2 and this month it came in at 31.5. May 2021 mortgage rates remained stable post report.

Wednesday – May 19th:

MBA Purchase and MBA Refinance Index: The MBA Purchase Index decreased this week, from 276.7 to 265.3. The MBA Refinance Index increased slightly from 3281.0 to 3413.3.

Tuesday – May 18th:

Housing Starts – April: There was a sharp decline in housing starts compared to last month (1,569,000 vs 1,739,000). Keep in mind that’s an annual rate.

Monday – May 17th:

NAHB Housing Market Index: The NAHB Housing Market Index came in as expected; 83.

Friday – May 14th:

Retail Sales: Last month the Retail Sales report came in at 9.8% and expectations for this report were for a 1.0% increase. However, the report came in at 0.0% which may end up benefiting May 2021 mortgage rates.
Consumer Sentiment: Last month it was at 88.3, and this month it came in at 82.8.

Thursday – May 13th:

Weekly Jobless Claims: The weekly jobless claims came in better than expected (473k vs 490k). Continued claims in at 3,655,000.00.
Core Producer Prices: The CPP came in at 0.7% vs expectations of a 0.4% increase.

Wednesday – May 12th:

MBA Purchase and MBA Refinance Index: The MBA Purchase Index increased this week, from 274.5 to 276.7. The MBA Refinance Index increased slightly from 3188.7 to 3281.0.
Consumer Price Index: The CPI came in MUCH higher than expected (monthly: 0.2% vs 0.8%) and this had an impact on May 2021 mortgage rates. The annual rate came in at 3.0% vs expectations of 2.3%

Friday – May 7th:

Monthly BLS Employment Report: The market was expecting 978,000 non-farm jobs created and the number came in well below that (266,000). The unemployment rate increased from 6.00% to 6.01%. Average earnings increased significantly this month (-0.1 vs 0.7). The report should end up having a positive impact on May 2021 mortgage rates.

Thursday – May 6th:

Weekly Jobless Claims: The weekly jobless claims came in better than expected (500k vs 498k). Continued claims increased slightly (3,660,000 vs 3,690,000). May 2021 mortgage rates remained stable post report.

Wednesday – May 5th:

MBA Purchase and MBA Refinance Index: The MBA Purchase Index declined this week, from 281.4 to 274.5. The MBA Refinance Index increased slightly from 3185.3 to 3188.7.
ADP Employment Report: While not as important as the monthly BLS jobs report, the ADP report can have an impact on mortgage rates. The ADP Employment Report came in below expectations (800k vs 742k). However, since it was a small miss there wasn’t a major impact on May 2021 mortgage rates.

Monday – May 3rd:

ISM Manufacturing PMI: Expectations were for the report to come in at 65.0 however it came in at 60.7 (last month it was 64.7). May 2021 mortgage rates had a positive reaction to the report.
Construction Spending: Last month Construction spending declined 0.8% and in the most recent report it came in at an increase of 0.2%.

Mortgage Rates And The Monthly Jobs Report

The market is expecting non-farm payrolls to come in at 978,000 jobs created, and private payrolls to come in at 893,000 jobs.

Expectations for the unemployment rate are at 5.8% and earnings to come in at 0.10%.

Jobs Report Update:

The monthly jobs report was a big miss. As mentioned above, non-farm payrolls came in at 266,000 which is well below the 978,000 the market was expecting. On the flip side earnings came in significantly higher than the market was expecting (0.0 vs 0.7).

The report will most likely be a positive for May 2021 mortgage rates.

May 2021 Mortgage Rates In California – Average

We’ll update this section as we move further into May however to start off the month we’re seeing the following averages.

The average 30-year fixed mortgage rate is 2.875%.
The average 20-year fixed mortgage rate is 2.625%
The average 15-year fixed rate is 2.125%.

This is an average of everyone we’re seeing; from less than perfect credit to excellent credit. Please keep in mind that mortgage rates adjust daily; sometimes multiple times during a day. For a mortgage quote specific to your situation please be sure to contact us directly.

Mortgage-Backed Securities & Treasury Snapshot

May 25th – May 28th:

Mortgage-Backed Security UMBS 2.0 started the week at the 100.86 level and the UMBS 2.5 coupon started at the 103.56 level. The 10y Treasury yield was at the 1.61% level to start the week.

At the end of the week, Mortgage-Backed Security UMBS 2.0 was at the 100.97 level and the UMBS 2.5 coupon was nearing the 103.59 level. The 10y Treasury yield was at 1.59%.

May 17th – May 21st:

Mortgage-Backed Security UMBS 2.0 started the week at the 100.70 level and the UMBS 2.5 coupon started at the 103.42 level. The 10y Treasury yield was at the 1.63% level to start the week.

At the end of the week, Mortgage-Backed Security UMBS 2.0 was at the 100.80 level and the UMBS 2.5 coupon was nearing the 103.50 level. The 10y Treasury yield was at 1.61%.

May 10th – May 14th:

Mortgage-Backed Security UMBS 2.0 started the week at the 101.20 level and the UMBS 2.5 coupon started at the 104.00 level. The 10y Treasury yield was at the 1.57% level to start the week.

At the end of the week, Mortgage-Backed Security UMBS 2.0 was at the 100.73 level and the UMBS 2.5 coupon was nearing the 103.47 level. The 10y Treasury yield was at 1.63%.

May 3rd – May 7th:

Mortgage-Backed Security UMBS 2.0 started the week at the 101.00 level and the UMBS 2.5 coupon started at the 103.75 level. The 10y Treasury yield was at the 1.61% level to start the week.

At the end of the week, Mortgage-Backed Security UMBS 2.0 was at the 101.23 level and the UMBS 2.5 coupon was nearing the 104.03 level. The 10y Treasury yield was at 1.58%.