June 19, 2019
Mortgage rates reacted favorably to today's Federal Reserve announcement and press conference--today's key events. But that doesn't mean every lender is in better shape than yesterday. The morning hours saw the bond market (which dictates rates) at weaker levels. Weaker bonds = higher rates, all other thing being equal. It wasn't until the 2pm Fed announcement that bonds began to improve, thus opening the window for mortgage lenders to issue new rates. Unfortunately, some lenders are less prone to mid-day reprices than others. There's also always a healthy fear of volatility in the bond market after the Fed announcement, even if bonds start out moving in a friendly direction.
On a final note, the press conference with Fed Chair Powell didn't start until 2:30pm. By the time he was done answering questions, it was getting to be a bit too late in the day for a few lenders to make any changes. The good news about all of that is tomorrow's rates will almost certainly reflect today's bond market improvements (assuming the lender in question did not, in fact, change rates this afternoon AND that the bond market is able to maintain current levels by tomorrow morning). For more detailed coverage on how the Fed affected bond markets today, check out my daily recap dedicated to bond markets and mortgage-backed-securities (MBS) HERE.
Loan Originator Perspective
Float-friendly thanks to Fed, unless you're up against a close-of-escrow deadline -Bob Van Gilder
Today's Most Prevalent Rates
- 30YR FIXED - 3.875%
- FHA/VA - 3.5-3.75%
- 15 YEAR FIXED - 3.75%
- 5 YEAR ARMS - 3.625-4.125% 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 (and even their EXPECTED 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, as well as trade-related concerns. The stronger the data and trade relations, the more rates could rise, while weaker data and trade wars will 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.