Rates Stay Low; Bigger Risks/Rewards Next Week

By: Matthew Graham •

Mortgage rates remained at recent lows today, as underlying bond markets strengthened.  For US Treasuries, this brought rates to new multi-month lows.  Mortgage-backed bonds, on the other hand, simply returned in line with the best levels of the week.  That allowed mortgage lenders to continue offering the best rates of the week (also the best rates in more than year!).

For most of 2019, rates have remained locked in a narrow range.  The past few days have done more than any others to challenge that range, but it will likely take friendly words from the Fed next Wednesday to fuel any further improvement. 

With that in mind, I'd say that much of the recent strength in rates is based on hopes for friendly central bank policies.  There's always a risk that the Fed isn't quite ready to say what markets are hoping they'll say.  If that's the case, we could see rates retreat back into the previous range.  Either way, next week presents a bigger risk/reward scenario in terms of how far rates could move.

 See Rates from Lenders in Your Area


Loan Originator Perspective

Bonds gained ground again today, as rates continued near 14 month lows.  Treasuries have profited more than MBS in our recent rally, you'd hope the two will equalize soon.  At any rate, I'm only locking loans within 30 days of closing, for risk averse borrowers.  Looks like the trend may be our friend for now. -Ted Rood, Senior Originator


Today's Most Prevalent Rates

  • 30YR FIXED - 4.375%
  • FHA/VA - 4.0-4.125%
  • 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.