April 15, 2019
Mortgage rates continued higher to start the week, following a relatively sharp increase on Friday. Interestingly enough, the underlying bond market was stable today. In other words, it didn't suggest higher rates. But the issue is that mortgage lenders adjust their rate sheets only a few times on the most volatile days. Many of them didn't get around to it on Friday afternoon. Those who did were greeted with another hour of bond market weakness before the week finally ended.
In other words, the underlying market was indeed suggesting we'd see mortgage rates roughly where they are today and lenders simply didn't have an opportunity to adjust their rate sheets accordingly. This brings the average lender to the highest levels seen since before the Fed's rate-friendly announcement back on March 20th. Some lenders are already higher than that, but most are close. Keep in mind that there can be worthwhile opportunities to "pay points" (a term with needless stigma, perpetuated by those with an incomplete understanding of the concept) at certain rate levels. For example, for most lenders, it makes almost no sense to lock a rate of 4.25% or 4.75% today (assuming a conventional 30yr fixed...) because the cost to buy down to 4.125% and 4.625% respectively is so much smaller than normal. That said, lender pricing strategies and buy-down policies vary widely. Bottom line: it's worth asking about, but it's not necessarily a given.
Loan Originator Perspective
Bonds were quiet today, with no meaningful economic data being released. Markets have a 3.5 day week with the Easter holiday, so I'm not looking for any huge movement. I'm still locking loans within 30 days of closing. -Ted Rood, Senior Originator
Lock on dips as it has been a volatile bumpy ride from moment to moment. Markets are extremely sensitive to data releases. -Al W Hensling
Today's Most Prevalent Rates
- 30YR FIXED - 4.25%
- FHA/VA - 4.0%
- 15 YEAR FIXED - 3.875-4.00%
- 5 YEAR ARMS - 3.875-4.25% depending on the lender
Ongoing Lock/Float Considerations
- Early 2019 saw a rapid reevaluation of big-picture trends in rates and in markets in general
- The Federal Reserve has been a key player, and while they aren't the ones pulling the global economic strings, their response to the economy has helped rates fall more quickly than they otherwise might.
- Based on the Fed's laundry list of concerns, their current outlook for rate hikes and economic growth, and their bond-buying policy shifts, we've all but certainly seen the highest rates of this economic cycle in late 2018.
- 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.