Mortgage rates began the day just like they've begun each of the past 5 business days: perfectly unchanged!  As we discussed yesterday, the recent absence of movement is a good thing in the short term as rates are holding near their lowest levels in more than a month.  And it's a bad thing in the bigger picture considering current levels are still very close to the highest rates in more than 7 years.

Unlike the past 5 business days, however, we caught a bit of a break today.  Fed Chair Powell delivered a speech at the Economic Club of New York and markets responded favorably.  Both stocks and bonds improved, and when bonds improve enough during the course of the day, mortgage lenders often recall their initial offerings in favor of something slightly better.  That was the case today.  Even if the improvement was barely noticeable in the grand scheme of things, it's nonetheless our first measurable improvement since early last week.

Does this change the longer-term trend?  Not really.  We'll still need to see a bigger shift in economic data or the stock market for interest rates to fall in a meaningful way.  That said, markets are increasingly on the lookout for such things as winter approaches.  

Loan Originator Perspective

Some bond-friendly comments from Fed Chairman Powell boosted bonds today, but we still remained within recent ranges.  Borrowers locking today should definitely wait until late afternoon to give lenders a chance to update their rates.  I'm still locking loans closing within 30 days. -Ted Rood, Senior Originator

Today's Most Prevalent Rates

  • 30YR FIXED - 4.875-5.0%
  • FHA/VA - 4.375%-4.625%
  • 15 YEAR FIXED - 4.375%-4.5%
  • 5 YEAR ARMS -  4.375%-4.875% depending on the lender

Ongoing Lock/Float Considerations

  • Rates continue coping with 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 (which certainly seems to be the case so far in 2018).

  • While rates were able to recover and stay sideways in the summer months, September and October have seen a surge up to the highest levels in more than 7 years. 

  • Upward pressure can continue as long as economic growth and inflation continue running near long-term highs.  Stay defensive (i.e. generally more lock-biased).  It will take a big change in economic fundamentals or geopolitical risk for the big picture to change.  Such things tend to not happen as quickly as we'd like.
  • 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.