October 22, 2018
Mortgage rates didn't move much today. Lenders who made changes to Friday's rate sheets generally did so toward slightly higher rates. Actually, it would be more precise to say those lenders raised upfront costs associated with any given rate. This is typical on days where the broader rate market is slightly weaker, but not weak enough for mortgage lenders to adjust mortgage rates by the standard 0.125% increment.
In the bigger picture, this leaves the average lender quoting conventional 30yr fixed rates of roughly 5% on top tier scenarios.
There were no major developments or economic reports to move the bond market (which underlies rates) today. The rest of the week is on the light side as well, but things pick up on Thursday and Friday.
Loan Originator Perspective
Bond markets slumbered through mid-day Monday, remaining in recent ranges. My pricing was virtually identical to Friday's. We'll break out of the current consolidation pattern sometime, but doesn't look like today's the day. I'm still locking loans closing within 30 days, and taking a hard look at those closing within 45 days as well. -Ted Rood, Senior Originator
Today's Most Prevalent Rates
- 30YR FIXED - 5.0%
- FHA/VA - 4.5-4.75%
- 15 YEAR FIXED - 4.5%
- 5 YEAR ARMS - 4.25%-4.75% 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.