February 21, 2019
Mortgage rates may be close to their lowest levels in more than a year, but they were slightly higher versus yesterday. Yesterday's rates were close enough to 1-year lows that no one would take exception with the claim. That said, rates on January 31st were slightly lower for most lenders.
Why all the fuss? No fuss, per se. It's just that many mainstream news outlets are running stories today about the "lowest rates in more than a year" due to Freddie Mac's weekly mortgage rates survey. Indeed, if we're just comparing the Monday/Tuesday 30yr fixed rate averages (which is essentially what Freddie's survey does), this week definitely qualifies as having the lowest rates in a year. As is always the case with delayed data, by the time you read about it, the story has often changed.
None of the above should be taken to suggest rates have risen enough to dissuade action. In fact, for most lenders, the actual interest rate applied to your loan balance is the same today as it was yesterday or on January 31st. The only change is in the upfront costs associated with that rate. This might cost you a couple hundred bucks in closing costs or a few bucks a month if financed over the life of the loan.
Loan Originator Perspective
Bonds continued consolidating today, while edging to their highest levels since Friday. We're due for a break out of the range soon, next week's data may well determine whether we break lower or higher. I'm still locking loans closing within 30 days, too little reward to justify the potential reward, for me. -Ted Rood, Senior Originator
Today's Most Prevalent Rates
- 30YR FIXED - 4.375 - 4.5%
- FHA/VA - 4.125 - 4.25%
- 15 YEAR FIXED - 4.0 - 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 began to die down in late 2018. A rapid decline in the stock market certainly helped drive investors into bonds (which helps rates) Highest rates in more than 7 years in Oct/Nov. 8-month lows by the end of the year
- This is a bit of a crossroads. The rising rate environment could flare up again. 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, late 2018 was a sign that rates are willing to take opportunities presented to them. From here, it will be up to economic data, fiscal policies, and the stock market to decide on the next set of opportunities. The rougher the overall outlook, the better interest rates tend to do.
- 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.