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Mortgage Rates Continue Much-Needed Recovery

By: Matthew Graham
Posted Wed, Nov 13 2019, 5:44 PM

Mortgage rates have been more willing to move higher than lower recently.  While that may continue to be the case in the near-term future, there have been pockets of resistance to that trend.  The first 2 days of this week seem to be just such a pocket.

The direction of the movement is good, but the magnitude may leave a bit to be desired, depending on your standards.  The average loan scenario would still be seeing the same "note rate" quote as yesterday, but the effective rate would be slightly better due to lower upfront borrowing costs. 

In the bigger picture, it makes sense to remain defensive about the possibility that the broader trend toward higher rates can continue.  We'd need to see a much more substantial push back toward lower rates in order to abandon that defensive stance.  


Loan Originator Perspective

Bonds got a whiff of hope after a WSJ report citing potential tariff agreement discord, and rates improved slightly Wednesday.  This is a volatile situation, so tough to bank on either more drama or continued progress.  I'm still locking my December closings early, with client consensus. -Ted Rood, Senior Originator 


Today's Most Prevalent Rates For Top Tier Scenarios 

  • 30YR FIXED -3.875-4.0%
  • FHA/VA - 3.375-3.5%
  • 15 YEAR FIXED - 3.375-3.5% 
  • 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 

  • 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.

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