Mortgage markets worsened for the second straight week last week as the U.S. labor market continued its swift expansion, which makes the Federal Reserve more likely to end its low-mortgage-rate programs for buyers. 30-year rates have climbed 0.375 percentage points since November.

This week, with little economic data due for release, the biggest news may be the confirmation of Mel Watt as Director of the Federal Housing Finance Agency (FHFA). The FHFA is parent to Fannie Mae and Freddie Mac and, as a consumer-friendly appointee, Watt as FHFA Director makes the passage of HARP 3 much more likely.

The long wait for HARP 3 may soon end.

Skip right to today's mortgage rates.

Mortgage Rates Rise To 4.46%

Last week was another rough week for shoppers of mortgage rates. Rates rose across all government loan types including conventional loans, FHA loans, Rural Housing loans, and loans via the Department of Veterans Affairs. 

Rates were at their best Tuesday morning. They were at worst Friday.

The price of a Fannie Mae bond dropped roughly 50 basis points on the week, as did the price of a Freddie Mac bond. This means that a mortgage rate which required zero discount points to lock last week now comes with a cost of 0.50 discount points.

For every $100,000 borrowed, this raises closing costs $450.

FHA and VA loans experienced similar deterioration, as did Rural Housing loans backed by the USDA. 

Jumbo loans, however, bucked the trend. Jumbo mortgage rates improved.

Jumbo mortgage rates are mortgage rates for loans which exceed an area's federal loan size limit. Jumbo loan sizes begin after $417,000 for conventional loans, except in certain "high-cost" areas of the country where they begin after $625,500. For FHA loans, jumbo mortgages begin after $271,050 except in high-cost areas where they limits stretch to $729,750.

In 2014, conforming loan limits will remain as-is; FHA loan limits will decrease.

Verify your  local mortgage loan limits here.

This Week : What Will Mortgage Rates Do?

For mortgage markets, last week was a busy one. In the housing market, New Home Sales thumped expectations and showed that the 2014 market may be as strong (or stronger) than this year's.

GDP also beat expectations, showing that the U.S. economy is expanding; and the monthly Non-Farm Payrolls report tallied more than 200,000 net new jobs added for the third time in 4 months, raising the total jobs created since 2010 to 7 million.

With the U.S. labor market making such gains, Federal Reserve may soon pare back its mortgage-rate suppression program, a stimulus plan known as QE3.

QE3 was first launched in September 2012 as a means to artificially lower U.S. mortgage rates in order to stimulate housing and create more jobs. The program was created with an open end-date, dependent on the health of the U.S. economy overall.

Via QE3, the Fed purchases $40 billion in mortgage-backed securities (MBS) and $45 billion in U.S. Treasury bonds in the open market monthly. The purchases push bond prices up, which drives bond yields down.

QE3 has held mortgage rates low for more than 15 months. However, its useful life may be ending. With economy is showing bona fide signs of improvement. the Federal Reserve may begin to "taper" the program's size, limiting the effects of QE3.

When that happens, mortgage rates are expected to rise, and they could rise quickly. Even the thought that QE3 might end can cause mortgage rates to rise. This is why every piece of "good data" is greeted by rising mortgage rates -- Wall Street is betting on the end of QE3.

This week, there won't be much data for Wall Street to watch. Therefore, be on the lookout for negative momentum. Once rates start rising, they can move quickly and without advance notice.

This week's calendar is as follows : 

• Monday : None
• Tuesday : None
• Wednesday : MBA Purchase Applications; 10-Year Treasury Auction
• Thursday : Initial Jobless Claims; Retail Sales
• Friday : Producer Price Index

It's also noteworthy that 4 speeches by members of the Federal Reserve are planned for this week, including two by Dallas Fed President Richard Fisher.

Expect the Federal Reserve speakers to give personal opinions on "what the Fed should do next" with respect to QE3 and future economic stimulus. Collectively, the Fed speakers could cause mortgage rates to change.

Click here for a no-obligation rate quote.

So, Will Congress Pass HARP 3 This Week?

Another big story this week is the expected confirmation of Mel Watt as FHFA Director. The FHFA is the conservator of Fannie Mae and Freddie Mac.

Watt's confirmation is potentially big news for U.S. homeowners because the FHFA administers the Home Affordable Refinance Program (HARP) for Fannie Mae and Freddie Mac, and Mel Watt is expected to expand HARP's current release into HARP 3.

Since launching in early-2009, the HARP program has been used by more than 2.9 million U.S. households. HARP 3 would be the program's third iteration -- one which could instantly add millions to the eligible loan pool.

HARP 3 has been teased by Congress and the White House under several brand names including #MyRefi and "A Better Bargain For U.S. Homeowners". Active bills in Congress refer to it as The Responsible Homeowner Refinancing Act of 2013. 

Whatever its final name, though, HARP 3 would differ from its predecessor, HARP 2. Any of the following HARP 3 updates are possible :

1. Homeowners can "re-HARP" a prior HARP refinance
2. Homeowners can HARP-refinance a non-Fannie Mae or non-Freddie Mac mortgage
3. Homeowners can HARP-refinance a loan from after May 31, 2009
4. Homeowners can HARP-refinance a second mortgage with a first mortgage

Although it's unlikely, the Federal Housing Finance Agency (FHFA) could pass HARP 3 on its own, without Congress. Millions of U.S. homeowners will be instantly refinance-eligible.

This week is the first week that could be possible.

Take A Look At Today's Mortgage Rates

Mortgage rates have climbed and it's an excellent time to review today's mortgage rates. Home buyers still get great deals on mortgage rates and refinancing households are still saving big money with mid-4 percent rates.

Compare today's rates and see for what you qualify. Rates are available at no cost and with no obligation.

Click here for a no-obligation rate quote.