Mortgage Rates Fall Back Toward Long-Term Lows

By: Matthew Graham •

Mortgage rates moved lower for the second straight day after rising moderately on Friday and Monday.  This brings the average lender to the second lowest levels in almost exactly 1 year.  The only day with lower rates was January 31st, 2019 (last Thursday). 

Yesterday was important in the sense that it helped make a case for a short-term ceiling in rates.  All bets were off as to where we might see such a ceiling after a round of strong economic data on Friday (stronger data tends to push rates higher).  Today is just as important as it confirms the resilience wasn't a fluke.  Granted, things can change quickly when it comes to financial markets, but it's currently easiest to make a case for sideways momentum for the time being.

This "wait and see" approach would ideally allow investors to digest all the incoming economic data missed during the government shutdown.  By mid-March, they'll be fully caught up on the data and will also get another major update from the Federal Reserve.  As such, that would be the time frame where we'd expect to see rates making bigger moves in the bigger picture.

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Loan Originator Perspective

Today's 10 year Treasury auction yielded average demand, and both MBS and bonds logged small gains.  While rates seem reasonably stable, I'm still locking loans closing within 30 days. -Ted Rood, Senior Originator

Bonds have managed to rally back to regain all losses from yesterday.   With the improved rate sheets, my recommendation is to go ahead and lock. -Victor Burek, Churchill Mortgage


Today's Most Prevalent Rates

  • 30YR FIXED - 4.5
  • FHA/VA - 4.125 - 4.25%
  • 15 YEAR FIXED - 4.0 - 4.125%
  • 5 YEAR ARMS -  4.25%-4.625% depending on the lender


Ongoing Lock/Float Considerations 

  • Headwinds that had plagued rates for most of the past 2 years began to die down in late 2018.  A rapid decline in the stock market certainly helped drive investors into bonds (which helps rates) Highest rates in more than 7 years in Oct/Nov.  8-month lows by the end of the year

  • This is a bit of a crossroads. The rising rate environment could flare up again.  We may look back at Oct/Nov and see a long-term ceiling, or we may look back at early December and see a temporary correction before more pain. 

  • Either way, late 2018 was a sign that rates are willing to take opportunities presented to them.  From here, it will be up to economic data, fiscal policies, and the stock market to decide on the next set of opportunities.  The rougher the overall outlook, the better interest rates tend to do.
  • 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.