January 7, 2020
Mortgage rates held steady today, keeping them in line with their lowest levels in more than a month. That's the good news. There's really not any bad news, per se. Rates could remain here or even move lower depending on events that will unfold in the coming days and weeks. But to some, the absence of improvement could be taken as a sign of resistance in the underlying bond market.
The same people seeing that resistance would also be quick to point out that a good amount of the recent move lower in rates owes itself to the flare-up in US/Iran tensions, and that lower rates would rely on tensions remaining or escalating further. True, that may happen, but if it doesn't, rates would increasingly experience upward pressure as days tick by.
In addition to geopolitics, interest rates will continue to take cues from economic data, among other things. On that note, there are several important reports due out by the end of the week with Friday bringing the typically important jobs report.
Loan Originator Perspective
Bond markets tread water Tuesday, staying in tight ranges just off Monday's best levels. My pricing mirrored Monday's. Until Iranian tensions ease, I don't foresee rates rising significantly. Most of my February closings are floating, since they're over 30 days from closing. -Ted Rood, Senior Originator
Failure to hold onto today's gains is a bad sign for the short term. Locking is advised. -Jason Anker Sr. Loan Officer
Today's Most Prevalent Rates For Top Tier Scenarios
- 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
- 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.