Mortgage rates avoided returning to reality yet again today. In other words, rates were almost perfectly unchanged for the 4th straight business day. These patterns (or lack thereof) are fairly typical of the thanksgiving time frame, but the return of volatility is a bit of a moving target after that. Clearly, we're not there yet.
That's a good thing in the recent context because it means rates are still operating at their lowest levels in more than a month. It's a bit more unpleasant in the broader context because it means rates are showing little desire to move much lower from their highest levels since 2011 (seen at the beginning of the month).
In non-rate-related news, the FHFA--Fannie Mae and Freddie Mac's regulator--announced higher conforming loan limits, from $453,100 to $484,350. In general, conforming loan allow for the lowest fixed rates. Limits are increased every November, assuming the FHFA has also observed an increase in average home prices during the previous fiscal year (Oct 2017-Sep 2018 in this case).
Today's Most Prevalent Rates
- 30YR FIXED - 4.875-5.0%
- FHA/VA - 4.375%-4.625%
- 15 YEAR FIXED - 4.375%-4.5%
- 5 YEAR ARMS - 4.375%-4.875% depending on the lender
Ongoing Lock/Float Considerations
- Rates continue coping with several big-picture headwinds, including: the Fed's rate hike outlook (and general policy tightening), the increased amount of Treasury issuance to pay for the tax bill (higher bond issuance = higher rates), and the possibility that fiscal stimulus results in higher growth/inflation (which certainly seems to be the case so far in 2018).
- While rates were able to recover and stay sideways in the summer months, September and October have seen a surge up to the highest levels in more than 7 years.
- Upward pressure can continue as long as economic growth and inflation continue running near long-term highs. Stay defensive (i.e. generally more lock-biased). It will take a big change in economic fundamentals or geopolitical risk for the big picture to change. Such things tend to not happen as quickly as we'd like.
- 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.