Mortgage Rates Inch Lower, But Remain Generally Sideways This Week

Mortgage rates finally moved in a direction that wasn't "up" today.  That said, it's debatable whether the direction would be best described as "lower" or "sideways."  To those who don't check in with rates too often or who aren't excited by saving a couple hundred bucks in closing costs, rates are sideways.  But for those for whom every little bit counts, the today's upfront costs would be slightly lower than yesterday's for any given interest rate quote. 

The upfront cost portion of a loan quote offers lenders more of a fine-tuning adjustment compared to changing actual rates, which tend to be offered in 0.125% increments.  Markets typically don't move enough in a single day for a 0.125% change in rates.  Upfront costs help adjust lender/borrower costs in those cases.  

Despite the relatively flat performance in loan quotes, there was quite a bit of volatility in underlying bond markets today.  This was mainly a factor of the Fed announcement and press conference at 2pm and 230pm respectively.  The issue is that bonds/rates had one big reaction to the announcement, and then an opposite reaction to the press conference.  The net effect was very little change from the pre-Fed trading levels.

Loan Originator Perspective

Bond markets posted slight gains on tepid AM inflation data, then soared briefly following the Fed Statement.  The gains evaporated during Chairman Powell's press conference, so we're essentially back where we started the day.  I'm still locking loans closing within 30 days, discussing the pros/cons of locking for clients closing 31-60 days out. -Ted Rood, Senior Originator

Today's Most Prevalent Rates

• 30YR FIXED - 4.25-4.375%
• FHA/VA - 4.0%
• 15 YEAR FIXED - 4.00% 
  
• 5 YEAR ARMS -  3.875-4.25% depending on the lender

Ongoing Lock/Float Considerations 

• Early 2019 saw a rapid reevaluation of big-picture trends in rates and in markets in general
  
  
• The Federal Reserve has been a key player, and while they aren't the ones pulling the global economic strings, their response to the economy has helped rates fall more quickly than they otherwise might.
  
  
• Based on the Fed's laundry list of concerns, the bond market (which determines rates) will be watching economic data closely, both at home and abroad.  The stronger the data, the more rates could rise, while weaker data could 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.