Mortgage rates rose today, largely in response to weakness in the bond market seen yesterday afternoon (and confirmed this morning). Mortgage rates follow the bond market, but mortgage lenders don’t like to adjust their offerings more than once a day if they can avoid it. Many lenders bumped rates up yesterday, but just as many held steady. Those who held steady had more ground to cover this morning to bring rates up in line with bond market movement. Long story short, if a lender increased rates yesterday, they were only modestly higher this morning. Other lenders were forced to raise rates more noticeably.
But no matter where rates are today, they may be somewhere else tomorrow. The bond market loves to react to updates from the Fed and tomorrow brings two important ones. In the morning, Fed Chair Powell delivers his semi-annual congressional testimony. This starts at 10am ET with prepared remarks, but can drag on for hours depending on how many questions are asked and how long Powell’s answers are. These testimonies have a history of causing volatility for rates even though there’s no guarantee of a big move. The afternoon brings the release of the Minutes from the most recent Fed Announcement. This simply provides a more detailed account of the statement from June 19th. Considering that statement marked a bit of a policy shift (or a potential shift anyway) the clarification offered in the Minutes could also have an impact.
Loan Originator Perspective
Bonds regressed slightly today, as Fed Chair Powell’s congressional testimony looms. In addition, tomorrow features Fed Minutes from June’s meeting and a treasury auction. It certainly won’t be boring. We’re lurking just below highest rates in a month (which are still very attractive), I’m locking new loans closing within 45 days for all but the most risk-craving clients. –Ted Rood, Senior Originator
Today’s Most Prevalent Rates
- 30YR FIXED – 3.875%
- FHA/VA – 3.5%
- 15 YEAR FIXED – 3.5-3.625%
- 5 YEAR ARMS – 3.375-3.75% 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 (and even their EXPECTED 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, as well as trade-related concerns. The stronger the data and trade relations, the more rates could rise, while weaker data and trade wars will 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.