April 30, 2019
Mortgage rates moved up again today, despite modest improvement in the bond market (which typically coincides with lower rates). Part of the reason for the counter-intuitive behavior is timing. Bonds lost ground yesterday afternoon. This implied higher rates, but many lenders didn't end up changing their mortgage rates. That meant the average lender began the day with a handicap. Moreover, today's bond market improvement didn't show up until a few hours into the morning.
Also at issue is the occasional discrepancies we see between broader bond markets and those that underlie mortgage rates. It's a common misconception that 10yr Treasury yields determine mortgage rate movement on any given day. That's only MOSTLY true, and even then, it's more like they are supplementary investments that simply tend to move in the same direction on any given day. Today, for instance, Treasuries had a much better day than the mortgage bonds.
Long story short, between the timing of the market movement and small relative gains, there wasn't any love for the average 30yr fixed rate quote, which is now as high as it's been in at least a week. Recent movement is small potatoes compared to what we might see in the coming days, however, due to several big economic reports and tomorrow's Fed policy announcement.
Loan Originator Perspective
Bonds regained their footing after a weak start, and posted slight gains by mid-day. Tomorrow brings ADP's April employment estimate and a FOMC statement, with the week's biggest data (April's NFP jobs report) hitting Friday. I'm locking May loans, floating most closing further out. -Ted Rood, Senior Originator
Today's Most Prevalent Rates
- 30YR FIXED - 4.25-4.375%
- FHA/VA - 4.0%
- 15 YEAR FIXED - 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, the bond market (which determines rates) will be watching economic data closely, both at home and abroad. The stronger the data, the more rates could rise, while weaker data could 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.