Mortgage rates hit the lowest levels in more than a month yesterday and came very close to the lowest levels in more than a year. Things changed today, but only slightly. Without a fresh supply of drama or weaker economic data, the bond market deteriorated. Bonds typically benefit when investors are seeking safe havens in response to economic risks. This pushes bond prices higher and yields (aka “rates”) lower.
Whereas there were concerns about Italian budget news and a weaker reading on Retail Sales yesterday, today brought stronger economic data across the board. Bonds reacted by weakening (i.e. moving higher in yield/rate) and that was basically that.
If there’s a saving grace for the bond/rate market is that the weakness found a limit fairly quickly and rates were only modestly higher. In fact, if you don’t count yesterday, we’re still looking at the lowest rates since early April.
Loan Originator Perspective
Rates rose slightly today, while remaining near one year lows. We’re going to need some drastic tariff trauma, geopolitical drama, or economic struggles to improve significantly from here. The long term trend may still be lower rates, but I am locking loans closing within 30 days to take rate risk off the table. –Ted Rood, Senior Originator
Today’s Most Prevalent Rates
- 30YR FIXED – 4.0-4.125
- FHA/VA – 4.0%
- 15 YEAR FIXED – 3.875%
- 5 YEAR ARMS – 3.875-4.25% depending on the lender
Ongoing Lock/Float Considerations
- Early 2019 saw a rapid reevaluation of big-picture trends in rates and in markets in general
- The Federal Reserve has been a key player, and while they aren’t the ones pulling the global economic strings, their response to the economy has helped rates fall more quickly than they otherwise might.
- Based on the Fed’s laundry list of concerns, the bond market (which determines rates) will be watching economic data closely, both at home and abroad. The stronger the data, the more rates could rise, while weaker data could lead to new long-term lows.
- Rates discussed refer to the most frequently-quoted, conforming, conventional 30yr fixed rate for top tier borrowers among average to well-priced lenders. The rates generally assume little-to-no origination or discount except as noted when applicable. Rates appearing on this page are “effective rates” that take day-to-day changes in upfront costs into consideration.