March 6, 2019
Mortgage rates improved again today, bringing them back to the lowest levels seen since last Thursday morning. Starting last Wednesday, we saw a fairly fast rate spike through the end of the week followed by 3 days of relative calm so far in the current week. The average lender has a bit farther to go to get back to the lowest of the recent lows seen at the beginning of last week.
Whether or not they're able to get there may depend on the next two days of important scheduled events. These include a policy announcement from the European Central Bank (ECB) tomorrow morning and the release of the big jobs report on Friday morning. In general, the more downbeat and cautious the ECB is about the economic outlook, the better it is for rates.
The effects would be felt primarily in Europe, but US markets tend to get some spillover. The jobs report is a far more direct consideration for rates in the US but the reaction function is the same: bad news for the economy=good news for rates. Conversely, if job growth is much better than expected, rates could come under quick pressure to move back up to recent highs.
Loan Originator Perspective
Bonds posted small gains today, as ADP's February job growth mirrored expectations. Friday's NFP report is still looming, and given last month's blowout report, has the potential to really hurt rates. I'm locking loans closing within 30 days. -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.