Mortgage rates spiked quickly today, capping a 3-day run leading back up from the lowest levels in more than a year. Today’s move was by far the biggest and it leaves the average lender offering rates that are at least an eighth of a percentage point (0.125%) higher compared to most of last week.
Part of the reason for the size of this move is the size of the move in the other direction over the past two weeks. For instance, compared to 2-3 weeks ago, the average lender is quoting rates that are still an eighth of a point lower. In other words, the bigger the rally, the bigger the potential bounce.
Whether or not this bounce continues may have a lot to do with the week’s remaining economic data and events. Today’s data was almost universally stronger than expected and stronger data tends to coincide with higher rates. There are important economic reports on 3 of the 4 remaining days of the week with Friday’s jobs report being the biggest consistent market mover of any economic report.
Loan Originator Perspective
Bond markets pulled back sharply today, as last week’s gains all but vanished. Stronger than predicted retail sales and manufacturing data prompted the selloff. The trend is now our enemy, time to lock applications closing within 45 days. –Ted Rood, Senior Originator
Today’s Most Prevalent Rates
- 30YR FIXED – 4.00-4.125%
- FHA/VA – 3.75-3.875%
- 15 YEAR FIXED – 3.75-3.875%
- 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, their current outlook for rate hikes and economic growth, and their bond-buying policy shifts, we’ve all but certainly seen the highest rates of this economic cycle in late 2018.
- 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.