Mortgage rates hit their best levels since late 2017 yesterday and have generally been making stellar moves for the past 2 weeks. To be fair, it's been the broader bond market (which dictates mortgage rates, among other things) that's been making the most stellar moves. Mortgages merely got pulled along for the ride.
It's disconcerting and perhaps even alarming, then, to see that broader bond markets scurried back in the other direction today. Depending on the time of day, the bond market weakness (which coincides with rising rates) ranged from moderate to significant. To put it in context, 10yr Treasury yields (which tend to move in concert with mortgage rates) moved higher at the fastest pace in nearly 2 months today.
With that in mind, it's nothing less than striking to consider the average lender continued to offer mortgage rates that were mostly in line with yesterday's offerings. As is frequently the case, this has a lot to do with timing. Yesterday afternoon brought bond market gains that never translated to mortgage rates. That allowed many lenders a good amount of insulation against today's weakness. Beyond that, the average lender hasn't been adjusting rates as quickly as markets have been moving. This, too, provides insulation.
Unfortunately, the timing issues go both ways. In today's case, there was some late bond market weakness that didn't make it into most lenders' rate sheets. That would have a negative effect on rates tomorrow unless bonds manage to bounce back between now and then.
Loan Originator Perspective
Bond markets regressed Tuesday, giving up Monday's robust gains while still remaining close to their best levels since late 2017. Rates may not have seen all the gains they should have yesterday, but were still very appealing this AM. I am locking loans closing within 30 days, hoping that today's losses don't carry into Wednesday. -Ted Rood, Senior Originator
Today's Most Prevalent Rates
- 30YR FIXED - 3.875%
- FHA/VA - 3.75%
- 15 YEAR FIXED - 3.875%
- 5 YEAR ARMS - 3.875-4.25% depending on the lender
Ongoing Lock/Float Considerations
- Early 2019 saw a rapid reevaluation of big-picture trends in rates and in markets in general
- The Federal Reserve has been a key player, and while they aren't the ones pulling the global economic strings, their response (and even their EXPECTED response) to the economy has helped rates fall more quickly than they otherwise might.
- Based on the Fed's laundry list of concerns, the bond market (which determines rates) will be watching economic data closely, both at home and abroad, as well as trade-related concerns. 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.