Mortgage rates finally fell today after remaining flat for the last 3 business days.  There are a few possible explanations for the friendly move, but the easiest to see and discuss is the weakness in the stock market. 

If you read my commentary somewhat regularly, you'll know that I'm no great fan of using the "stocks vs bonds" explanation for rate movement (bonds = rates), but in today's case, weakness in stocks was clearly correlated with strength in bonds (stronger bonds = lower rates).  Much of this weakness surrounded trade-related headlines, however, so it's just as fair to say that bonds were reacting to trade war news.

Either way, the lion's share of the reaction was reserved for mainstream bonds like US Treasuries.  MBS (the mortgage-backed-securities that underlie mortgage rates) didn't do as well by comparison.  As such, the improvements in mortgage rates are fairly minimal.  The average borrower will still be seeing the same NOTE rate as yesterday, just with slightly lower upfront costs (or a higher lender credit).

Loan Originator Perspective

Nice little rally today, but lenders appear to be holding back on passing along our recent gains.   As long as you feel okay floating, i think it is worth the risk to float overnight and evaluate pricing in the morning. -Victor Burek

Bonds posted slight gains as of mid-PM today, and both MBS and treasury yields are at June's best levels.  I'm cautiously floating new applications for now, hoping my rate sheets will soon reflect the gains.  There's not much meaningful data the remainder of the week, I don't see any major immediate sell-off risks. -Ted Rood

Bonds continue to surprise. Still favor locking at origination. -Al Hensling

Today's Most Prevalent Rates

  • 30YR FIXED - 4.625-4.75
  • FHA/VA - 4.25-4.5%
  • 15 YEAR FIXED - 4.125%
  • 5 YEAR ARMS -  3.75-4.25% depending on the lender

Ongoing Lock/Float Considerations

  • Rates have been moving higher in a serious way due to headwinds that cannot be quickly defeated.  These include the Fed's increasingly restrictive monetary policy outlook, the increased amount of Treasury issuance to pay for the tax bill (higher bond issuance = higher rates), and the possibility that fiscal stimulus results in higher growth/inflation.

  • While we may see periodic corrections to the broader trend toward higher rates, it's safer to assume that broader trend can and will continue.  Until that changes, it makes much more sense to remain heavily-biased toward locking as opposed to floating.
  • 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.