October 28, 2019
Mortgage rates increased again today as lenders continued to get caught up with 2 days of bond market weakness. When bonds are weaker, prices are moving lower and yields (aka "rates") are moving higher. Rates have been rising in general for almost the entire month October after taking a another run at long-term lows. The previous attempt (a successful one) saw rates hit the lowest levels in more than 3 years at the beginning of September.
With the early October lows representing a modest increase from the early September lows, there's a risk that a bigger-picture shift is taking place. Simply put, the long-term trend of falling rates that began roughly 1 year ago could be in the process of shifting toward a trend of rising rates.
Loan Originator Perspective
Bonds continued their recent slide today, as rumors of US/China tariff progress appeared. While rates haven't soared, they are now near levels last seen in mid-September. I'm locking loans closing within 45 days for risk-averse clients. -Ted Rood, Senior Originator
Bonds continue to drift toward higher yields taking rates with them. Any rally is quickly met with selling. My clients are favoring to lock as soon as possible. -Victor Burek, Churchill Mortgage
Today's Most Prevalent Rates
- 30YR FIXED -3.75-3.875%
- 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.