Much Calmer Day For Mortgage Rates

Mortgage rates held steady today--a welcome development after yesterday's move higher.  In the bigger picture, rates have done an acceptable job of moving back down after spiking at the fastest one-week pace in years 2 weeks ago.  The entirety of last week was spent moving lower.  Now this week's theme seems to be best described as holding steady.

To quantify the timeline described above, the big spike in rates earlier this month took the average lender .375% to .50% higher in rate from the long term lows seen at the beginning of the month.  Last week's improvements have only allowed lenders to drop rates by about .125% from those recent highs.  

The bond market (which dictates rates) is on the lookout for cues from two key sources at the moment.  On the one hand, unscheduled, unexpected headlines concerning the trade war (or other geopolitical headlines) have had a clear impact on rates.  They will continue to be potential sources of volatility.

On the other hand, there's the logical, old-fashioned connection with economic data.  Reports that point to a stronger economy will generally put upward pressure on rates, but some reports are more relevant than others in that regard. Tomorrow's PCE inflation data is generally one of the more meaningful reports as an uptick in inflation would prevent the Fed from being as aggressive as it might otherwise be with monetary policy (which is good for rates!).  Tomorrow also brings the important Durable Goods report as well as an update on Consumer Sentiment.

Loan Originator Perspective

Bond markets recouped part of yesterday's losses today, but my pricing is still well off Wednesday AM's.  We'll need a couple days' worth of gains to retrace recent lows.  I'll float new applications overnight, presuming today's gains will be reflected on tomorrow's rate sheets.   -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.