Mortgage rates jumped to the highest levels in 2019 yesterday, even if only by a small margin.  It was one of the few abrupt moves we've seen in recent weeks, relative to the average day-over-day change.  Whereas yesterday's move was abruptly higher, today's rates moved lower at approximately the same pace. 

The European Central Bank (ECB) announcement served as the source of inspiration.  As you'd expect, this was a bigger deal for Europe, but when we're dealing with the world's major central banks, the effects tend to spill over into foreign markets.  This is frequently true between the US and Europe.  Long story short, the ECB echoed many of the same concerns shared by their American counterparts at the Fed in recent weeks.  Specifically, several lingering uncertainties could weigh on global growth.  Furthermore, the ECB expects economic data to deteriorate and inflation to move lower before it moves higher.  Both of those assumptions are good for rates.  

Keep in mind, however, that we're talking about fairly small course corrections in the bigger picture.  At best, rates have been sideways for most of January, but a case could certainly be made that they've been moving gradually higher on average.  Either way, it makes sense to remain defensive when it comes to lock/float decisions until a friendlier trend gains traction.

Loan Originator Perspective

Bonds rallied today, regaining yesterday's losses after some dovish comments from ECB head Draghi.  GDP estimates continue to retreat as the federal shutdown showdown continues.   I'm locking applications closing within 30 days, will wait and see for those closing further out.  -Ted Rood, Senior Originator

Today's Most Prevalent Rates

  • 30YR FIXED - 4.5%
  • FHA/VA - 4.25%
  • 15 YEAR FIXED - 4.125%
  • 5 YEAR ARMS -  4.25%-4.625% depending on the lender

Ongoing Lock/Float Considerations

  • Headwinds that had plagued rates for most of the past 2 years began to die down in late 2018.  A rapid decline in the stock market certainly helped drive investors into bonds (which helps rates) Highest rates in more than 7 years in Oct/Nov.  8-month lows by the end of the year

  • This is a bit of a crossroads. The rising rate environment could flare up again.  We may look back at Oct/Nov and see a long-term ceiling, or we may look back at early December and see a temporary correction before more pain. 

  • Either way, late 2018 was a sign that rates are willing to take opportunities presented to them.  From here, it will be up to economic data, fiscal policies, and the stock market to decide on the next set of opportunities.  The rougher the overall outlook, the better interest rates tend to do.
  • 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.