Mortgage rates remained in line with 3-month lows today for the average lender. Several lenders offered marginally better terms compared to yesterday, but in those cases, the only changes were to the upfront costs associated with the same rates quoted yesterday.
It's a pleasant surprise to see rates as low as they are considering several economic reports have been quite strong recently. In general, stronger economic data tends to put upward pressure on rates. That was a risk today with today's Existing Home Sales report coming in at the best levels since early 2018. But econ data isn't the only consideration for the bond market that underlies day-to-day rate movement.
Low inflation, geopolitical tensions, and even concerns over the Coronavirus outbreak are just three of many other factors that are offsetting the occasional strong economic report. That said, if most economic reports start coming out much stronger than expected, it will be hard for rates to continue at current levels. Central bank policy at home and abroad will also play a role. The European Central Bank will be out with a periodic policy update tomorrow and the Fed will follow a week later.
Even if it's not central banks and not economic data that prompts a shift, occasionally rates can move in one direction simply because they've spent enough time moving in the other direction. With that in mind, the general trend has been toward lower rates for nearly a month now.
Loan Originator Perspective
Rates are pretty much at 3 month lows, so always a good idea to lock in at the recent lows. If you can tolerate some risk and maybe a higher rate, and closing in more than 15 days, i would roll dice and float overnight. -Victor Burek, Churchill Mortgage
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.