September 30, 2019
Mortgage rate movement was fairly uneventful last week. The bond market (which is most directly responsible for driving day-to-day changes in mortgages rates) was focused on consolidating, meaning the gaps between lows and highs were getting smaller and smaller. At the same time, there wasn't significant movement in the average trading prices of the bonds that underlie mortgages. In other words, rates were mostly sideways for much of the week.
Over the past few business days, the sideways momentum gradually began to give way to modest improvements. Lenders have been slow to adjust their rate sheet offerings, but as of today, the average lender is back in line with its lowest rates since September 9th. More than a few lenders offered mid-day improvements today. Those who didn't will be able to catch up tomorrow morning, as long as the underlying bond market hasn't moved too much by then.
Loan Originator Perspective
Bonds remained confined with their narrow recent range today, and my pricing improved minimally from Friday's. DC impeachment drama hasn't incited a rush to bonds yet, but could as details emerge. I'm still locking my October closings early, going case by case for November's. -Ted Rood, Senior Originator
Today's Most Prevalent Rates
- 30YR FIXED -3.75%
- FHA/VA - 3.375%
- 15 YEAR FIXED - 3.375%
- 5 YEAR ARMS - 3.25-3.75% depending on the lender
Ongoing Lock/Float Considerations
- 2019 has been the best year for mortgage rates since 2011. Big, long-lasting improvements such as this one are increasingly susceptible to bounces/corrections and as of September, it looks like such a correction is underway
- Fed policy and the US/China trade war have been key players. Major updates on either front could cause a volatile reaction in rates
- The Fed and the bond market (which dictates rates) will be watching economic data closely, both at home and abroad, as well as trade war updates. 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.