Mortgage rates bounced higher today, after making it to the best levels in more than a week yesterday afternoon.  Markets responded to a strong home sales report and political headlines.  The net effect was upward pressure on stock prices and interest rates.  Much like yesterday, most of the movement in rates was seen in US Treasuries, but the average mortgage lender was not immune.  

The net effect is the highest 30yr fixed rates of the week, but that sounds a bit more ominous than it is.  The timing of yesterday's market movement worked in our favor as the average lender hadn't fully accounted for the improvement in bond markets by the end of the day (bond market improvement implies lower rates).  That left a bit of a cushion for today's rates.  In other words, they didn't have to move too much higher to get to the levels implied by the bond market.

The bigger concern is the road ahead.  Today's shift in the bond market was fairly abrupt.  It's the sort of shift that frequently implies traders are willing to keep pushing rates higher unless given a compelling reason to reconsider.  Such a reason would have to come from weak economic data or a political headlines with clear implications for economic negativity or uncertainty. 

Loan Originator Perspective

Bonds regressed to their highest yields of the week today, amid rumors of possible China trade progress and impeachment drama.  It's somewhat discouraging to see impeachment as a "risk off" event, but this is just the start.  I am continuing to lock October closings early in the process, today's a great example of why I'm using that strategy. -Ted Rood, Senior Originator

Today's Most Prevalent Rates

  • 30YR FIXED -3.75%
  • FHA/VA - 3.375%
  • 15 YEAR FIXED - 3.375% 
  • 5 YEAR ARMS -  3.25-3.75% 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 and as of September, it looks like such a correction is underway

  • Fed policy and the US/China trade war have been key players.  Major updates on either front could cause a volatile reaction in rates

  • 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.