November 23, 2018
Mortgage rates were every bit as flat as expected today. That's a good thing at the moment, considering we're holding in line with the lowest levels in more than a month. For the average borrower, that's roughly an eighth of a percentage point lower than 2 weeks ago, when rates were near 8-year highs.
The Thanksgiving week is typically uneventful for the bond markets that underlie mortgage rates, largely due to inconsistent participation among traders and other people in the supply chain for rates. The pace tends to pick up in the following week and especially in the first week of December as markets settle in to their final approach ahead of the mid-December Fed Announcement--oftentimes a focal point of end-of-year volatility.
Loan Originator Perspective
As expected, bond markets slumbered through today, eyeing the Thanksgiving break. We've traded in a narrow range all week, but have sustained minimal losses. I'm locking clients closing within 30 days, and discussing locks with those 31-45 days from closing. Happy Thanksgiving, and thanks to all faithful MND readers! -Ted Rood, Senior Originator
Today's Most Prevalent Rates
- 30YR FIXED - 4.875-5.0%
- FHA/VA - 4.375%-4.625%
- 15 YEAR FIXED - 4.375%-4.5%
- 5 YEAR ARMS - 4.375%-4.875% 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.