Rates remain Low

Mortgage Rates Off Recent Lows by Mathew Graham

Mortgage rates moved slightly higher over the past two days as strong economic data and corporate earnings coaxed investors into riskier assets like stocks.  Bonds (which dictate interest rates) are always being bought and sold, but demand varies depending on investors’ risk appetite.  If demand for bonds falls as it has in the 2nd half of this week, rates move higher.

Fortunately, this move has been very small in the bigger picture.  Mortgage rates, specifically, have moved even less than rates associated with other bonds.  The average lender is still able to offer 30yr fixed rates of well under 4% on top tier scenarios.  And the average borrower wouldn’t see more than 0.00125% of difference from the lowest rates in more than 3 months.  Bottom line, while rates are slightly higher than their best recent levels, you’d have to go back to early October or before to see anything significantly better.


Loan Originator Perspective

Rates rose slightly Friday, as the 3 day MLK weekend loomed.  Keep in mind we’re still closer to recent rate lows than not.  It appears we’ll need something dramatic for things to improve drastically from here.  I am locking most February closings. –Ted Rood, Senior Originator


Today’s Most Prevalent Rates For Top Tier Scenarios 

  • 30YR FIXED – 3.625 -3.75%
  • FHA/VA – 3.375%%
  • 15 YEAR FIXED – 3.25 – 3.375% 
  • 5 YEAR ARMS –  3.25-3.75% depending on the lender


Ongoing Lock/Float Considerations 

  • 2019 was the best year for mortgage rates since 2011.  Big, long-lasting improvements such as this one are increasingly susceptible to bounces/corrections 

  • 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.

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