January 11, 2019
Mortgage rates improved today, breaking a 3-day streak with effectively no change. This gets us part of the way back down to the long-term lows achieved at the end of last week. At that time, the average lender was quoting conventional 30yr fixed rates that were roughly 5/8ths of a percentage point (0.625%) lower than the long-term highs seen at the beginning of November. Rates then lurched higher by Tuesday of this week, eroding as much as a quarter of a point from some scenarios. Today's gains restored about half of that weakness for a net improvement of 0.5% from November's highs.
At any time before last week, today's rates would be the lowest since April 2018. The swiftness with which those lows were achieved led some investors to worry about a swift bounce back. But it seems that as long as the stock market isn't bouncing back too swiftly that rates are content to fly more of a holding pattern. For the record, rates and stocks don't always follow each other in lock step, but they've been more correlated than normal since stock market volatility picked up in Q4-2018.
Loan Originator Perspective
Bond markets posted minor gains today, as inflation data matched expectations. The longer the shutdown lingers, the more potential it has to inform bond movement. Consumer confidence, GDP, retail sales, and more all stand to drop if the DC Drama continues. For now, I'm still locking loans within 30 days of closing, floating most that have more time until close. -Ted Rood, Senior Originator
Today's Most Prevalent Rates
- 30YR FIXED - 4.5%
- FHA/VA - 4.25%
- 15 YEAR FIXED - 4.125%
- 5 YEAR ARMS - 4.25%-4.625% depending on the lender
Ongoing Lock/Float Considerations
- Headwinds that had plagued rates for most of the past 2 years are slowly dying down. The rising rate environment could flare up again, and some headwinds remain in effect, but the broader tone has taken a more optimistic shift.
- Highest rates in more than 7 years in Oct/Nov. Lowest rates 8 months by the end of the year.
- This is a bit of a crossroads. We may look back at Oct/Nov and see a long-term ceiling, or we may look back at early December and see a temporary correction before more pain. Either way, it's one of the more hopeful positions we've been in for several years.
- 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.