November 1, 2018
It's Thursday! That means it's time, once again, to set the record straight on today's actual mortgage rates as opposed to those suggested by almost any other news article on the topic today. Why should you trust me as opposed to a multitude of financial journalists telling you something else? Simply put, they're relying on Freddie Mac's weekly mortgage rate survey (which can be unavoidably stale) whereas I'm using a multitude of actual lender rate sheets to derive a highly reliable/accurate average. Those using Freddie's numbers are relying predominantly on lender quotes from Monday and Tuesday whereas I've updated my averages in just the past hour, and for the 2nd time today!
Because the Freddie survey is always based largely on Mon/Tue numbers, the higher rates at the beginning of last week set a high baseline for this week's survey. In fact, if we compare actual lender rate sheets from Mon/Tue only, this week's rates are indeed lower. The issue is that last week's rates dropped noticeably by Friday. Since then, they'd risen noticeably through this morning before moderating somewhat lower this afternoon.
The net effect is current rates that are slightly HIGHER than those seen last week. Granted, this distinction is akin to splitting hairs for most prospective borrowers, but it's nonetheless important not to expect today's rates to be lower than Fridays. Prospective borrowers may well infer such a thing based on other news articles and then wonder if their friendly neighborhood loan originator is shooting straight with them.
Tomorrow continues to be a potentially important day for rates as the big jobs report is more than capable of causing volatility, for better or worse.
Loan Originator Perspective
Bond markets posted a small afternoon rally on the cusp of Friday's NFP jobs report, and several lenders improved their PM pricing. It's always a gamble to float into NFP reports, since they come out prior to bond markets opening. I don't expect a huge swing one way or the other, but a horrifically poor (or remarkably strong) report could help/hurt pricing. I'm still locking loans within 30 days of closing, for all but the most risk-craving clients. -Ted Rood, Senior Originator
Today's Most Prevalent Rates
- 30YR FIXED - 4.875-5.0%
- FHA/VA - 4.5%
- 15 YEAR FIXED - 4.5%
- 5 YEAR ARMS - 4.25%-4.75% depending on the lender
Ongoing Lock/Float Considerations
- Rates continue coping with several big-picture headwinds, including: the Fed's rate hike outlook (and general policy tightening), 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 (which certainly seems to be the case so far in 2018).
- While rates were able to recover and stay sideways in the summer months, September and October have seen a surge up to the highest levels in more than 7 years.
- Upward pressure can continue as long as economic growth and inflation continue running near long-term highs. Stay defensive (i.e. generally more lock-biased). It will take a big change in economic fundamentals or geopolitical risk for the big picture to change. Such things tend to not happen as quickly as we'd like.
- 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.