Mortgage rates ended their recent winning streak yesterday, but they have yet to try to get a losing streak started! In other words, rates bottomed out after a week and a half of improvement on Wednesday and they haven't really budged since then. This leaves them at the lowest levels of November--certainly well under 4% for top tier scenarios--but certainly higher than 2019's lowest levels seen in early September.
Underlying market movement is conveying plenty of uncertainty right now. While that certainly has something to do with the patterns typically seen heading into the Thanksgiving holiday, it has even more to do with the fact that there are legitimate reasons for investors to be uncertain. Chief among these are the wide spectrums of outcomes for the US/China trade deal (and timeline) and the general tone of economic data going forward.
Bottom line, rates are still at a major crossroads where they'll have to decide if they're going to bounce back toward higher levels after 2019's epic winning streak or if they're merely biding their time before finding more fuel to move lower.
Loan Originator Perspective
Friday marked a sedate day to a slow week for MBS. Since Monday, prices stayed within a tight range, varying less than 25 bps. With Thanksgiving looming, next week looks to be equally non-exciting. I am locking December closings, floating 2020's for all but the most risk-averse clients. -Ted Rood, Senior Originator
There is a clearly formed Head and Shoulders pattern for the 10 year treasury at the moment. Technical patterns as a means for prediction can be debated ad nauseam but they remain a “thing” regardless. Recent failure to reach 1.67 confirms an ascending shoulder which would typically signal we’ve reached the bottom of the current trend. I’ve liked locking recently and would recommend the same to anyone closing in the next 30-45 days or at least until we can break 1.70-1.74 resistance. -Jason Anker - Sr. Loan Officer
Today's Most Prevalent Rates For Top Tier Scenarios
- 30YR FIXED -3.75%
- 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
- 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.