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