Yesterday, we talked about how mortgage rates were actually lower this week, despite some news coverage to the contrary, and how that discrepancy was the result of a logical misunderstanding.  Today takes the discrepancy to another level as rates fell even farther.  The average lender is very close to offering the lowest rates seen in over a year. In fact, if we're talking about the "note rate" (the actual interest rate applied to a mortgage balance), we're at the lows already.  It's only when we consider the upfront costs that today's overall rate/fee scenarios aren't quite there yet. 

Let's not split hairs though: rates are effectively as good as they've been in a long time.  There are multiple factors behind the friendly move and there are multiple landmines in the weeks ahead.  These will be a factor right from the outset in the week ahead.  To be clear, you shouldn't expect rates to move higher or lower, but you should be on guard against volatility.  From here on out, day-to-day moves run the risk of being bigger than we've seen over the past few months.

Loan Originator Perspective

Today's NFP jobs report fell far short of expectations, yet bonds barely nudged upward.  Rates improved marginally from Thursday.  Once again, we're range bound, and when rates near range's bottom, it takes far more to move them.  I'm locking loans closing within 30 days, going case by case on those closing further out. -Ted Rood, Senior Originator

Another jobs report has come and gone and bonds are holding near the bottom of our range.   Following the strategy of lock the lows, float the highs, i would strongly consider locking in today.   -Victor Burek, Churchill Mortgage

Today's Most Prevalent Rates

  • 30YR FIXED - 4.375 - 4.5%
  • FHA/VA - 4.125 - 4.25%
  • 15 YEAR FIXED - 4.0 - 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.