March 14, 2018
Mortgage rates fell again today as several economic updates painted a slightly gloomier picture. In general, weaker economic data coincides with lower rates. First up were Retail Sales numbers, which moved into negative territory in February. Analysts expected a modest improvement. Later in the morning, several widely-followed sources of GDP tracking adjusted Q1 estimates significantly lower. For instance, the Federal Reserve Bank of Atlanta keeps a running tally of where GDP would come out today given the incoming data. Today's reading fell to 1.9% from 2.5% last week.
Following the GDP tracking updates, stock prices added to an already weaker performance and bond yields followed. Declining bond yields coincide with lower mortgage rates although that depends on lenders seeing enough of a decline to release new rate sheets in the middle of the day. Most lenders did, but the improvements were modest. The average borrower is likely to see the same interest rate at the top of the page (i.e. same NOTE rate) but with slightly lower upfront costs today (i.e. lower EFFECTIVE rate). With these gains, the average lender has inched down to the same rates seen on March 1st.
Loan Originator Perspective
Still locking all loans as early as possible. Unless the 10 year can break below 2.81, i see no benefit in floating. -Victor Burek, Churchill Mortgage
Today's Most Prevalent Rates
- 30YR FIXED - 4.5-4.625%
- FHA/VA - 4.375%
- 15 YEAR FIXED - 3.875%
- 5 YEAR ARMS - 3.5-3.75% depending on the lender
Ongoing Lock/Float Considerations
- 2017 had proven to be a relatively good year for mortgage rates despite widespread expectations for a stronger push higher after the presidential election in late 2016.
- While rates remain low in absolute terms, they moved higher in a more threatening way heading into the beginning of 2018
- The scariest part of the move higher looks like it ended as of early February, and rates have been generally sideways since then
- Even so, the potential remains for more weakness (i.e. higher rates). It makes more sense to remain defensive (i.e. more inclined to lock) until we've seen a more convincing shift lower.
- 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.