Mortgage rates were already at their lowest levels in a few weeks by yesterday afternoon--a journey that largely consisted of baby steps.  There have been a few days that have seen more movement than others and today certainly qualified, thanks to an incredibly weak manufacturing report.

What does a manufacturing report have to do with mortgage rates?  As today shows us, quite a lot!  The bond market that underlies interest rates has always been in the business of reacting to economic data.  Some reports and some periods of time are more important than others.  Data is currently a bit more important than it has been and manufacturing data has more of the spotlight than normal due to the trade war's impact.

The underlying bond market actually began the day suggesting HIGHER rates, and indeed, many lenders offered slightly higher rates at first.   After the data, however, bonds surged back into stronger territory and almost every lender ended up offering improved terms a few hours later.  The average lender ultimately offered the lowest rates since September 9th.

Loan Originator Perspective

Bonds opened down sharply, then reversed course after ISM data showed US manufacturing declined in September.  I'm still locking October closings at origination, going case/case for November's.  I'm not convinced rates won't get a boost from current DC Drama, appears that hasn't happened yet though.   -Ted Rood, Senior Originator

Today's Most Prevalent Rates

  • 30YR FIXED -3.625%
  • FHA/VA - 3.375%
  • 15 YEAR FIXED - 3.375% 
  • 5 YEAR ARMS -  3.25-3.75% depending on the lender

Ongoing Lock/Float Considerations 

  • 2019 has been the best year for mortgage rates since 2011.  Big, long-lasting improvements such as this one are increasingly susceptible to bounces/corrections and as of September, it looks like such a correction is underway

  • Fed policy and the US/China trade war have been key players.  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 trade war updates. 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.