30 Year Fixed
4.63%    -0.02
15 Year Fixed
4.12%    -0.03
10YR Treasury
2.83%    -0.0202
FNMA 30YR 3.5
99.61    +0.11
FNMA 15YR 2.5
99.48    +0.09
Lowest Rates Since May, But There's a Catch
July 13, 2018

Mortgage rates fell by an observable amount today--one of the few times they've done so in recent weeks.  Technically, today's average lender is offering the best we've seen since May 31st.  That sounds pretty great, right?!  Unfortunately, there's a fairly big catch.

While today's rates are indeed the best in a month and a half, the range during that time has been so excruciatingly narrow that most prospective mortgage borrowers will find the distinction fairly meaningless.  In almost all cases, the actual NOTE rate at the top of your loan quote will be the same as it has been for weeks.  The only change in lenders' rate sheets is in the upfront cost associated with that rate. 

In other words, if you'd seen a quote of 4.75% with 0 points yesterday, today's quote would be more like 4.75% with a lender credit of 0.15 points.  More simply put, if your mortgage amount is $300,000, that'd save you 450 bucks in closing costs.  Granted, $450 is $450, but it doesn't pack quite the same punch as "lowest rates since May!"


Loan Originator Perspective

Another sedate summer day for bond markets.   They posted minimal gains, but not enough to matter.  I'm still locking early for most clients, there's not much to be gained by floating these days. -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.

30 Year Fixed Rate Mortgage
15 Year Fixed Rate Mortgage
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Today's Rates
Best Execution
Rate Change
30 Yr FRM 4.63% -0.02
15 Yr FRM 4.12% -0.03
FHA 30 Year Fixed 4.35% -0.03
Jumbo 30 Year Fixed 4.54% -0.04
5/1 Yr ARM 3.95% -0.04
Average Mortgage Rates
Rate Points Change
FHFA *
15 Yr. Fixed 3.65% 1.14 +0.09
30 Yr. Fixed 4.19% 1.21 +0.02
MBA **
30 Yr. Fixed 4.68% 0.46 -0.01
15 Yr. Fixed 4.12% 0.51 +0.05
30 Yr. Jumbo 4.55% 0.37 +0.00
30 Yr. FHA 4.69% 0.81 -0.04
5/1 ARM 3.83% 0.68 -0.10
Freddie Mac **
30 Yr. Fixed 4.53% 0.40 +0.01
15 Yr. Fixed 4.02% 0.40 +0.03
1 Yr. ARM 2.68% 0.20 +0.01
5/1 Yr. ARM 3.86% 0.30 +0.12
* FHFA averages are updated monthly.
** Mortgage Bankers Association (each Wednesday) and Freddie Mac (each Thursday) averages are updated weekly.
Secondary Markets
MBS
Price Change
30YR FNMA 3.0 97.00 +0.13
30YR FNMA 3.5 99.61 +0.11
30YR GNMA 3.0 98.14 +0.02
30YR GNMA 3.5 100.45 0.00
15YR FNMA 3.0 99.48 +0.09
15YR FNMA 2.5 97.27 +0.09
Treasuries
Yield Change
2 YR 2.5820% -0.0080
5 YR 2.7266% -0.0219
10 YR 2.8289% -0.0202
30 YR 2.9315% -0.0154
Prices as of: 7/13/2018 3:54PM EST
MBS and Treasury data provided by Thomson Reuters.
Mortgage News Daily and MBS Live! are exclusive re-distributors of Real Time Thomson Reuters Mortgage Information.
Secondary Marketing Managers:
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About This Report
Mortgage News Daily is a trusted source of mortgage rate market data and analysis, with over 1 million readers each month. Unlike many rate surveys, our survey is conducted on a daily basis and is designed to bring you the most current and accurate rate data available.  We use a proprietary formula to calculate averages based on best-execution rates from top lender's rate sheets, also taking into account feedback from hundreds of mortgage market professionals around the country.