Mortgage rates were noticeably higher through yesterday afternoon as the bond market had generally been bouncing back from the more extreme levels achieved last week.  Markets approached today's Jackson Hole symposium with open minds as to the potential outcomes from Fed Chair Powell's much-anticipated speech.  But even before that speech, China announced tariffs on US goods.  And shortly after Powell's speech, Trump's trade-related tweets rocked the market again.

Between China and Trump, Powell didn't stand a chance.  This is a market fixated on the long-term potential fallout for the real economy based on an escalating trade war.  Traders give the Federal Reserve a tremendous amount of respect as a market mover, but ultimately, the Fed's role only amounts to a fine-tuning adjustment to the core drivers of the global economy.  In general, markets assume trade wars will drive economic momentum lower/weaker, and that tends to help bond yields and interest rates move in the same direction.

Keep in mind that mortgages are doing a lousy job of following other rates at the moment, but they were nonetheless able to enjoy a small portion of the move seen in 10yr Treasury yields.   This lagging performance will only change with time, and will only be easy to see if bond markets manage to stabilize as well.  Until then, progress can come but it will be slow going.

Loan Originator Perspective

Somewhat predictably, a Trump Tariff Tweet spooked stock markets this AM, boosting bonds.  While many lenders improved their pricing, it appears they're still reluctant to pass along the full gains.  MBS prices are near their 30 day high, but my pricing isn't quite there.  Regardless, this is a great locking opportunity for those closing within 30 days.  Folks with more time may want to wait for the next political trauma to erupt before locking. -Ted Rood, Senior Originator 

Trade war heating up again.   China just slapped new tariffs on US goods sending bond yields lower.   I think it is worth the risk to float over the weekend, to see how we respond.   More tariffs on our side, should help bonds hold onto todays gains and possibly add to them.  If you do want to lock, hold off until later in day to allow lenders time to reprice for the better.  -Victor Burek, Churchill Mortgage

Today's Most Prevalent Rates

  • 30YR FIXED - 3.5 - 3.625%
  • FHA/VA - 3.25-3.5%
  • 15 YEAR FIXED - 3.125 - 3.375% 
  • 5 YEAR ARMS -  3.375-3.75% depending on the lender

Ongoing Lock/Float Considerations 

  • 2019 has been the best year for mortgage rates since 2011.  Big, long-lasting improvements such as this one are increasingly susceptible to bounces/corrections.

  • Fed policy and the US/China trade war have been key players

  • The Fed and the bond market (which dictates rates) will be watching economic data closely, both at home and abroad, as well as trade war updates. 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.