April 17, 2019
Mortgage rates continued higher for the 5th day in a row today. This brings the average lender to the highest levels in exactly one month. At issue: a series of stronger economic reports at home and abroad have eased concerns about global growth. Not only is a strong economy associated with higher rates in general, but those "concerns" were a big part of the Federal Reserve's decision to be more bond-friendly back in March. With concerns arguably lessened by recent data, investors may be assuming the Fed won't be quite as bond friendly going forward. All that having been said, the Fed is NOT likely to make any big changes after one solid month of global economic data.
The most immediate cause for pressure toward higher rates came overnight in the form of Chinese economic data. Along with Europe, China is one of the two economies the Fed is most concerned with. China had been on a decidedly downbeat path until the past few months. US interest rates didn't care too much about the initial resilience in the Chinese economy due to the sugar high delivered by a friendly Fed. European economic weakness also helped keep rates low heading into the end of March.
To whatever extent the data in Europe and China continue to show stability or resilience, interest rates in the US could face additional upward pressure. That would be especially true if domestic economic data is similarly strong.
Loan Originator Perspective
Bonds rebounded slightly today, as rates stabilized. The hope is that we've seen the worst of this short term selloff, but it's too early to know on that. I'm still locking loans closing in the next 30 days, taking it case by case for those closing slightly further out. -Ted Rood, Senior Originator
Hard to recommend floating right now. The recent trend has been working against us. If your pricing is similar to yesterday, I think it's wise to go ahead and lock in today. -Victor Burek, Churchill Mortgage
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.