Whereas mortgage rates were almost undetectably higher yesterday, they were lower by roughly the same insignificant amount today. In either case, and unless they make a much bigger move, they’re generally hanging out near the lowest levels in more than a year. For the sake of context, if we’re talking about the rate range prior to January 2018, today’s rates would be the highest since April 2014 by a wide margin.
Today’s big to-do was the congressional testimony from Fed Chair Jerome Powell. The Federal Reserve had an active week of communications last week, with numerous members talking about the Fed’s plans to make a fairly important change that would affect its bond buying policies (and thus, mortgage rates). Rather than shed any light on that discussion, Powell kept it general and simply said the Fed is now in a place to have that discussion. As such, there wasn’t any major reaction in the bond market (which directly affects consumer rates, like mortgages).
Loan Originator Perspective
Bonds barely budged, yet again, despite Fed Chairman Powell’s Senate testimony. Rates are in a remarkably tight range, my pricing has been flat for days. I’m still locking loans closing within 30 days. –Ted Rood, Senior Originator
Today’s Most Prevalent Rates
- 30YR FIXED – 4.375 – 4.5%
- FHA/VA – 4.125 – 4.25%
- 15 YEAR FIXED – 4.0 – 4.125%
- 5 YEAR ARMS – 4.25 – 4.625% depending on the lender
Ongoing Lock/Float Considerations
- Headwinds that had plagued rates for most of the past 2 years began to die down in late 2018. A rapid decline in the stock market certainly helped drive investors into bonds (which helps rates) Highest rates in more than 7 years in Oct/Nov. 8-month lows by the end of the year
- This is a bit of a crossroads. The rising rate environment could flare up again. We may look back at Oct/Nov and see a long-term ceiling, or we may look back at early December and see a temporary correction before more pain.
- Either way, late 2018 was a sign that rates are willing to take opportunities presented to them. From here, it will be up to economic data, fiscal policies, and the stock market to decide on the next set of opportunities. The rougher the overall outlook, the better interest rates tend to do.
- 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.
BY: MATTHEW GRAHAM