Mortgage rates were almost perfectly unchanged today.  That leaves them right in line with last Friday's levels.  I devoted a considerable number of words in yesterday's article to explaining why most other articles about mortgage rates were inaccurate yesterday.  Suffice it to say that the absence of change compared to last Friday fully drives home the point I was making.  In short, due to the primary source data that most news organizations use for their big mortgage story each week, the average article proclaimed a nice drop in rates.  In actuality, that drop happened at the end of last week.  From there, rates have barely budged.  

These rates aren't the worst we've seen and they're not the best.  They're pretty comparable to most of the past few months.  You'd have to go back to May 2018 to see anything appreciably worse, but if you go back much farther, rates would look better and better (until you get to 2011, and then they'd look worse again).  The bottom line is that we're kicking the can sideways just off long-term highs.  Ups and downs have been small in recent weeks/months as underlying bond markets come to terms with a new, higher-rate reality.  There's no telling when that range will give way, but when it does, rates should move with a greater sense of urgency.

Loan Originator Perspective

Bonds swung from opening weakness to small mid day gains, but both were inconsequential in the big picture.  Bonds have rallied decently so far in August, but it appears it'll take more motivation to move them much further.  I'm still locking applications within 30 days of closing, floating some that are closing over 30 days out.  -Ted Rood, Senior Originator

Today's Most Prevalent Rates

  • 30YR FIXED - 4.625-4.75
  • FHA/VA - 4.25-4.5%
  • 15 YEAR FIXED - 4.125%
  • 5 YEAR ARMS -  3.75-4.25% depending on the lender

Ongoing Lock/Float Considerations

  • Rates moved higher in a serious way due to several big-picture headwinds, including: the Fed's rate hike outlook (and general policy tightening), the increased amount of Treasury issuance to pay for the tax bill (higher bond issuance = higher rates), and the possibility that fiscal stimulus results in higher growth/inflation.

  • Despite those headwinds, the upward momentum in rates has cooled off heading into the summer months.  This could merely be the eye of the storm, or it could end up being the moment where markets began to doubt that prevailing trends would continue.

  • It makes sense to remain defensive (i.e. generally more lock-biased) because the headwinds mentioned above won't die down quickly.  Temporary corrections can be explained away, but it will take a big change in economic fundamentals or geopolitical risk for the big picture to change.  While that doesn't necessarily mean rates have to skyrocket, there's a good chance it means rates will struggle to move much lower than early 2018 lows until more convincing motivation shows up.
  • 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.