Great Day For Mortgage Rates, But There's a Catch

By: Matthew Graham •

Mortgage rates added to last week's friendly rebound with their best single-day drop in more than a month today.  Weak economic data in Europe and tepid domestic data helped drive demand in safe-haven bond markets.  Higher bond market demand means lower rates, all other things being equal.  But it can take some time for movement in the bond market to translate to changes in mortgage lenders' rate sheets.  Most of today's improvements were due to bond market gains that were already in place by this morning.

As the day progressed, bonds drifted back in the other (less friendly) direction.  When that sort of drift results in enough bond market movement, mortgage lenders can change their rate offerings in the middle of the day.  Several of them did so today.  Those who didn't will be more likely to offer slightly higher rates in the morning (unless bonds manage to bounce back in a friendlier direction again overnight).

 See Rates from Lenders in Your Area


Loan Originator Perspective

Bond markets posted small gains Monday, as ECB Chairman Draghi's comments prompted global growth concerns.  It appears we've weathered the worst of our post Labor Day rate run-up, at least for now.  Looks like bonds are content to stay in current ranges at the moment.  I am locking applications closing within 30 days for all but the most risk-craving clients. - Ted Rood, Senior Originator


Today's Most Prevalent Rates

  • 30YR FIXED -3.75%
  • FHA/VA - 3.375%
  • 15 YEAR FIXED - 3.375% 
  • 5 YEAR ARMS -  3.25-3.75% depending on the lender


Ongoing Lock/Float Considerations 

  • 2019 has been the best year for mortgage rates since 2011.  Big, long-lasting improvements such as this one are increasingly susceptible to bounces/corrections and as of September, it looks like such a correction is underway

  • Fed policy and the US/China trade war have been key players.  Major updates on either front could cause a volatile reaction in rates

  • The Fed and the bond market (which dictates rates) will be watching economic data closely, both at home and abroad, as well as trade war updates. The stronger the data and trade relations, the more rates could rise, while weaker data and trade wars will 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.