Mortgage Rates Jump to 7-Year Highs

May 15, 2018

Mortgage rates spiked in a big way today, bringing some lenders to the highest levels in nearly 7 years (you’d need to go back to July 2011 to see worse).  That heavy-hitting headline is largely due to the fact that rates were already fairly close to 7-year highs, although today did cover quite a bit more distance than other recent “bad days.”

In fact, today covered more ground BECAUSE we were so close to those highs.  This has to do with trading strategies that are based on math and momentum.  The high rates from 3 weeks ago were the same as the high rates seen in 2013/2014.  That reinforced a magic line in the sand that–if crossed–was likely to result in extra momentum moving through to the other side.  True to the formula, today was the first official break of those 2013/2014 highs in terms of 10yr Treasury yields (a benchmark for longer-term rates like mortgages) and as soon as that break occurred, it quickly turned into the heaviest day of selling in months (“selling” bonds = higher rates).

Today’s Best-Execution Rates

Best Execution
Rate Change from yesterday
Conventional 30 Yr Fixed 4.75% +0.09
Conventional 30 Yr Fixed 4.17% +0.11
FHA 30 Year Fixed 4.50% +0.05
Jumbo 30 Year Fixed 4.79% +0.10

Mortgage Rates Uninspired by Fed or Economic Data

May 2, 2018

Mortgage rates were flat to slightly higher today, depending on the lender.  The average lender was quoting the same rates as yesterday, but with slightly higher upfront costs (or a lower credit, depending on your scenario).  That said, if you could only choose one word to describe the movement, it would be “flat.”

The flat trajectory has been intact for 3 straight days, even though today’s events had enough street cred to cause a shift in momentum.  The morning hours brought and important economic report and an even more important update on the Treasury’s borrowing needs.  Rates care about Treasury issuance because it’s the foundation of the “supply” side of the supply/demand equation for bonds (and bonds dictate rates).  Rates care about economic data because a stronger economy can generally support higher rates and it also increases pressure on the Fed to buy fewer bonds (reducing that “demand” side of the equation) or to hike its policy rate.

In today’s case, neither the economic data nor the Treasury’s announcement were outside the bounds of investors’ expectations.  The last chance for any high drama arrived with the 2pm Fed Announcement.  Investors already knew the Fed wasn’t planning on changing rates (or anything else) today, but there’s always some curiosity surrounding their choice of words.  Today’s announcement was right down the middle, and rates were consequently unmoved, for better or worse.

Potential volatility remains in play tomorrow and the next day, with more economic data, including the important jobs report on Friday morning.



Best Execution
Rate Change
30 Yr FRM 4.65% +0.02
15 Yr FRM 4.03% +0.02
FHA 30 Year Fixed 4.47% +0.02
Jumbo 30 Year Fixed 4.70% +0.02

Mortgage Rates Recover For 2nd Straight Day

April 27, 2018

Mortgage rates moved lower again today, bringing them back in line with Monday’s levels for the average lender.  That said, rate sheets have been very stratified between lenders during the recent spat of volatility.  In other words, even if 2 lenders were similarly-priced on Monday, they might not be today.  Compared to Wednesday (highest rates this week), today’s rates are nearly an eighth of percent lower.

The improvement in bond markets (which underlie rates) was somewhat serendipitous in the sense that there was no overt motivation in terms of economic data or news headlines.  That’s not to say there were no big economic reports (indeed, the first reading of Q1 GDP was released this morning)–just that they didn’t elicit a big response in bonds.


Today’s Best-Execution Rates

Best Execution
Rate Change
Conventional 30 Yr FRM 4.61% -0.03
Conventional 15 Yr FRM 3.99% -0.03
FHA 30 Year Fixed 4.43% -0.02
Jumbo 30 Year Fixed 4.65% -0.03

Mortgage Rates Catch a Break

April 26, 2018

Mortgage rates caught a break today, as underlying bond markets made it back into Tuesday’s territory.  Refreshingly, lenders were willing to set rates back at Tuesday’s levels.  That may sound exceedingly logical considering bond markets dictate rate movements, but it’s an exception to the recent rule that’s seen lenders err on the side of caution when it comes to following every little movement in bonds.

In other words, lenders have been quick to raise rates when bonds are weaker and slow to bring them back down when bonds recover.  That makes today something of an opportunity for anyone who wished they’d locked their rate on Tuesday.  Simply put, now you can!

These sorts of recoveries are tricky business from a forecasting perspective.  Of course there’s a temptation to hope for more when we see a nice improvement after so much weakness, but there are many examples of days like today giving way to higher rates in the coming days.  With no way to know for sure, and with benchmark rates like the 10yr Treasury yield close to scary tipping points between 4 and 6 year highs, it makes sense to remain cautious from a lock/float standpoint.

Today’s Best-Execution Rates

Best Execution
Rate Change
Conventional 30 Yr Fixed 4.64% -0.05
Conventional 15 Yr Fixed 4.02% -0.04
FHA 30 Year Fixed 4.45% -0.05
Jumbo 30 Year Fixed 4.68% -0.02

The Top Still Isn’t In For Mortgage Rates

April 25th, 2018

Mortgage rates had another rough day as they continued moving up into new 4-year highs.  Unlike the extremely mild and uneventful day-to-day changes seen for most of the past 2 months, rates are actually putting some distance between themselves and the March plateau.

Whereas a well-qualified borrower with 25% down may have been quoted a conventional 30yr fixed rate of 4.5% a few weeks ago, they’d already be looking at 4.75% today for most lenders.  Of course, this can vary a bit from lender to lender, but the point is that all lenders have experienced that sort of delta.

Will it ever stop?  Yo! I don’t know!  Actually, I do know.  The answer is yes, but I don’t know when.  Rates could (and SHOULD if we’re being honest) continue even higher from here.  They may not do so in a straight line, but barring an unforeseen market shock, today’s rates aren’t the highest you’ll see in 2018.


Today’s Best-Execution Rates

Conventional 30 Yr Fixed 4.69% +0.05
Conventional 15 Yr Fixed 4.06% +0.04
FHA 30 Year Fixed 4.50% +0.05
Jumbo 30 Year Fixed 4.70% +0.01

Mortgage Rates Push Farther Into 4-Year Highs

April 24, 2018

Mortgage rates moved somewhat higher again today, thus pushing them farther into the highest levels in more than 4 years. This isn’t the result of anything that happened today, but rather an ongoing process whereby the bond market (which underlies rates) is coming to terms with big-picture, long-term headwinds mentioned in the bullet points at the bottom of this article.

Whereas rates had leveled off and even improved somewhat during March and early April, they’ve quickly shown more volatile colors.  Borrowers are definitely seeing rates that are an eighth of a point higher from last week and, in many cases, a quarter of a percentage point higher than 2018’s best levels.

Tomorrow brings several flashpoints that keep the volatility potential high.  These include the 1st report on Q1 GDP, and important Treasury auction (which acts as a gauge of investor demand for bonds), and the biggest day of this “earnings season” (more of a factor for stocks, but stock trading can occasionally spill over and affect bonds/rates).

Today’s Best-Execution Rates

Best Execution
Rate Change
Conventional 30 Yr Fixed 4.64% +0.03
Conventional 15 Yr Fixed 4.02% +0.03
FHA 30 Year Fixed 4.45% +0.02
Jumbo 30 Year Fixed 4.69% +0.04

NOW Mortgage Rates Are at 4-Year Highs

April 23, 2018

Mortgage rates moved markedly higher today, officially leaving them at new 4-year highs.  The only other time they’ve earned that distinction this year was in February–NOT last week as all the major surveys claimed.  To be clear, they were certainly close last week, but the surveys didn’t account for some of the worst individual days in February.  Does any of this really matter?  No, not so much.  Here’s what matters:

The average lender is quoting very well-qualified borrowers with huge down payments something north of 4.5% on conventional 30yr fixed mortgages today.  Let’s call it 4.625%.  Up until Friday, that number hadn’t been over 4.5% except for on a few of those ill-fated February days.

Also important is the message that such a move sends.  Simply put, the bond market (which underlies rates) could be telling us that it’s getting back into the same gear seen last Fall and in early 2018.  In general, that’s characterized by pervasive, relentless movement toward higher rates.  The saving grace is that the underlying causes for that movement had already hit markets to some extent in late 2016.  So it remains to be seen how much more pain will be priced into rates before more investors feel bonds make sense to own (when more investors buy bonds, rates move lower, all other things being equal).

Today’s Best-Execution Rates

Best Execution
Rate Change
Conventional 30 yr fixed 4.61% +0.03
Conventional 15 yr fixed 3.99% +0.04
FHA 30 Year Fixed 4.43% +0.06
Jumbo 30 Year Fixed 4.65% +0.06

Mortgage Rates Quickly Approaching 4-Year Highs

April 20, 2018

Let’s clear one thing up before we begin.  Freddie Mac, MBA, and Ellie Mae all noted new 4-year highs in mortgage rates this week.  They are all technically wrong.  This has to do with the way their data is collected and/or averaged.  And while I have no doubt that they are accurately conveying the results of their data collection efforts according to their methodology, there is a more accurate way to do things.  Specifically, we can track actual lenders’ rate sheets every day.

Even if we take an average of that daily data, we still find that rates aren’t quite back to 4-year highs just yet.  Depending on the lender, these occurred on one of the days near the end of February.  In fact, some lenders’ rates from March 21st are still higher than today’s.  Are we talking about very big differences between now and then?  Not at all!  But if we’re going to talk about rates hitting 4-year highs, we might as well be precise about it.

One thing everyone can agree on is that today’s rates are higher than yesterday’s, which in turn, were higher than Wednesday’s.  The lion’s share of that move higher happened yesterday, but today’s underlying bond market movement suggests there’s a bit more pain yet to be priced-in to the average lender’s mortgage rate sheets.  If bonds deteriorate further this afternoon, some lenders could adjust their rate sheets today.  Those who don’t will will simply be starting next week at a disadvantage.  In other words, even if bonds are unchanged on Monday morning, mortgage lenders would likely need to begin the day with higher rates compared to today’s.

Today’s Best-Execution Rates

Best Execution
Rate Change
Conventional 30 yr fixed 4.58% +0.02
Conventional 15 yr fixed 3.95% +0.01
FHA 30 Year Fixed 4.37% +0.02
Jumbo 30 Year Fixed 4.59% +0.02


Mortgage Rates Jump to Highest Levels in About a Month

April 19, 2018

Mortgage rates jumped higher today as bonds continued a move away from narrow Springtime range seen in March and early April.  Bonds dictate rate movement and yesterday saw the bond market make its first convincing attempt to break what had been a friendly, narrow range.  This, of course, coincided with a narrow range for rates in the past few months.  It was also “friendly” relative to the trajectory seen in the first part of the year.

When these sorts of ranges become established, the boundaries take on a special significance.  As soon as the floor or the ceiling is definitively broken, there tends to be some additional momentum in the direction of the break.  That’s why yesterday’s headline mentioned that bonds were suggesting “more trouble ahead.”  I’d hoped to be wrong about that, but here’s the trouble: today’s rates are as high as they’ve been since March 21st.  A few lenders are slightly higher.  Thankfully, that doesn’t mean too much of a change for most rate quotes.  Conventional 30yr fixed quotes for top-tier scenarios are up 0.125% at most.  Even so, it makes sense to remain lock-biased as we may not have seen the last of the “additional momentum” mentioned above.

Today’s Rates

Best Execution
Rate Change
Conventional 30 Yr fixed 4.56% +0.06
Conventional 15 Yr fixed 3.94% +0.04
FHA 30 Year Fixed 4.35% +0.07
Jumbo 30 Year Fixed 4.57% +0.05


Mortgage Rates Inch Higher as Bonds Suggest More Trouble Ahead

April 18, 2018

Mortgage rates moved higher today as bond markets continued a mildly weaker trend for the month of April.  Bonds (which underlie rates) are under pressure for a variety of reasons.  The most notable headwinds are longer-term and bigger-picture.  Rates responded to these headwinds in a fairly big way in Jan/Feb and have basically been “taking a break” since then.

Rates have moved very little during this “break,” with most borrowers being quoted the same NOTE rate on any given day in the past 2 months.  Upfront costs have been the only way the modulate the EFFECTIVE rate of the average lender’s 30yr fixed quote.

Today’s move in bonds brings 10yr Treasury yields to their highest levels since March 21st.  While this, in and of itself, doesn’t rekindle the same sort of drama seen in the first 2 months of the year, it’s raising questions as to whether or not we’re headed back in that direction.  Were the past 2 months just a temporary reprieve?  The eye of the storm?  There’s no way to know the answer today.  There’s also no change to lock/float strategy, which has been generally lock-biased since mid-December.

Today’s Best-Execution Rates 

Best Execution
Rate Change
Conventional 30 Yr fixed 4.50% +0.01
Conventional  15 Yr fixed 3.90% +0.01
FHA/VA 30 Year Fixed 4.28% +0.03
Jumbo 30 Year Fixed 4.52% +0.02

Ongoing Lock/Float Considerations

  • 2017 had proven to be a relatively good year for mortgage rates despite widespread expectations for a stronger push higher after the presidential election in late 2016.
  • While rates remain low in absolute terms, they moved higher in a more threatening way heading into the beginning of 2018
  • The scariest part of the move higher looks like it ended as of early February, and rates have been generally sideways since then
  • Even so, the potential remains for more weakness (i.e. higher rates).  It makes more sense to remain defensive (i.e. more inclined to lock) until we’ve seen a more convincing shift lower.