July 16, 2019
Mortgage rates were flat to slightly higher today, following a stronger-than-expected Retail Sales report. The bond market (which dictates mortgage rates) was eagerly awaiting the week's first major economic data. Even though the Fed will almost certainly cut rates at the end of the month, additional cuts depend heavily on the balance of economic data. To whatever extent the data is strong, the Fed becomes less likely to continue cutting rates and the broader financial market becomes less interested in bonds. When investors are interested in buying bonds, it's good for rates!
Fortunately for prospective borrowers, today's movement was minimal. In fact, many lenders are effectively unchanged versus yesterday. Moreover, bonds managed to improve throughout the day with those specifically underlying mortgages able to make it almost all the way back to yesterday's range. Lenders didn't adjust their rate offerings to reflect the market improvement today as the move wasn't quite big enough. That means rates should be flat to slightly lower tomorrow IF the bond market manages to hold steady by tomorrow morning.
Loan Originator Perspective
Rates drifted slightly higher today, as retail sales data exceeded expectations. Fed Chairman Powell delivered some dovish remarks, providing some support mid day. There's not much data to inform rates the rest of the week, so I don't look for large moves here. I'm locking most loans closing in August. -Ted Rood, Senior Originator
I continue to not like floating in this market. It seems a 50bps cut to the fed fund rate is baked in but i fear we might only get a .25 cut which in my opinion will cause rates to give back some of the recent gains. Only loans i would float over night would be ones where you can lock tomorrow on a shorter time period. -Victor Burek, Churchill Mortgage
Today's Most Prevalent Rates
- 30YR FIXED - 4.00%
- FHA/VA - 3.625%
- 15 YEAR FIXED - 3.5-3.625%
- 5 YEAR ARMS - 3.375-3.75% 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.