February 4, 2020
Mortgage rates have been on a tear recently. The average lender has either held rates steady or improved them every single day since January 16th. Some of those improvements have been substantial, ultimately resulting in the lowest rates in more than 3 years as of the past 2 business days. Today, however, finally brought an end to the winning streak with the first meaningful move back in the other direction.
"Meaningful" may not be too meaningful depending upon how closely you're following rate movements. The average lender is still easily able to offer conventional 30yr fixed rates of 3.5% on top tier scenarios. The bigger issue is merely the risk that today marks some sort of turning point in the bigger picture. It's too soon to know if that's what this is, but it's definitely the first obvious candidate since the coronavirus rate-drop began.
Loan Originator Perspective
Wuhan virus concerns appear to be waning, and bond yields rose again Tuesday. We're well off last Friday's lows, the trend is no longer our friend. I'm locking loans closing within 45 days. - Ted Rood, Senior Originator
Today's Most Prevalent Rates For Top Tier Scenarios
- 30YR FIXED - 3.375-3.5%
- FHA/VA - 3.125 - 3.25%
- 15 YEAR FIXED - 3.125-3.25%
- 5 YEAR ARMS - 3.25-3.75% depending on the lender
Ongoing Lock/Float Considerations
- 2019 was 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 (and more recently, the coronavirus outbreak). 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 updates on other factors like trade and viral epidemics. The stronger the data the more rates could rise, while weaker data 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.