May 15, 2019
Mortgage rates have had a few first world problems to complain about recently. Well, there's really only been one: a relative inability to keep pace with the broader decline in rates as seen in the Treasury market. If Treasuries are the "master," mortgage rates are the proverbial dog on a leash. The dog can pull ahead, heel faithfully, or drag recalcitrantly behind. The latter has been mortgage rates' M.O. for the past few weeks owing to some abstruse loan performance data that made investors rethink the value they were placing on mortgage investments.
But now, the broader rate market has done well enough over the past two weeks that even the mortgage market is forced to participate. To be clear, mortgage rates haven't dropped nearly as much as Treasuries, but at least they've dropped! The average lender is easily at the lowest levels since late March, 2019. They're also getting very close to breaking below those levels (it would only take another day or two like today). If that happens, rates would officially be at the lowest levels in well over a year, and the going rate on a conventional 30yr fixed loan would be just under 4% in the most ideal scenarios.
Loan Originator Perspective
Bonds regained their footing, as continued tariff tensions and weak retail sales data riled investors. I'm not sure rate sheets fully reflect our recent gains yet, so am holding off locking most applications. Folks closing within 30 days who are happy with their pricing should lock, of course, and take risk off the table. -Ted Rood, Senior Originator
Today's Most Prevalent Rates
- 30YR FIXED - 4.0-4.125
- FHA/VA - 4.0%
- 15 YEAR FIXED - 3.875%
- 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.