Mortgage Rate News

With most lenders still easily able to quote a 30yr fixed under 3% , mortgage rates are very low in outright terms. But relative to the recent trend and the general level of volatility, today was a bit rough. Rates rose as fast as they've risen since early June, ultimately hitting the highest levels in more than 2 weeks. Some prospective borrowers will now be looking at an eighth of a point (0.125%) increase versus yesterday's rates. That comes out to roughly $20/month on a $300k mortgage. Others will experience the shift in the form of higher upfront costs (or a lower lender credit). Either way, today is noticeably more expensive than yesterday. The bigger question is whether this rate spike is a sign of things to come or merely a normal market correction that got a bit carried away. At some

Years from now when scientists examine mortgage rates in July 2020, they'd be forgiven for coming to the conclusion that rates only ever move lower. As we've learned in the first week of August, rates also rise. To be fair, there were a few days in July where more than a few lenders moved slightly higher in rate, but it really wasn't until this week that we arguably saw a shift in the broader trend--or at least warning signs about a potential shift. What does that mean, exactly? It might not mean much at all, depending on where we go from here. Over longer time horizons, it's entirely possible that rates return to recent record lows. This week's upward movement serves as more of a warning about complacency and about being ready to lock if you happen to have a loan in process. In that regard

There are quite a few more new stories than normal about mortgage rates today. Most of them are wrong. This one is not, and it's pretty easy to see why. Freddie Mac releases its weekly mortgage rate survey every Thursday morning. The survey accepts responses from Monday through Wednesday, but based on a comparison of day-to-day rates versus the survey numbers, it would appear Monday's rates get most of the weight, Tuesday's slightly less, and Wednesday's almost none. In other words, the survey has historically compared Mon/Tue rates to Mon/Tue rates. That's not a problem if that was made more clear by the throng of journalists that cite the survey as the definitive word in week-over-week rate movement. As it stands, however, we have headlines unequivocally proclaiming mortgage rates are at

Mortgage rates cooled off today, rising for the first time since July 27th for the average lender. Between now and then we've seen a string of what have mostly been new record lows with top tier 30yr fixed offerings well under 3%. For more on what constitutes a "top tier scenario," check out yesterday's explainer . It's an interesting time for rates. We've seen record lows before, but we haven't seen this combination of staying power at those lows coupled with the expectation for additional improvements in the future. In other words, it was pretty logical for rates to drop quickly in response to covid-related realities and it would be pretty logical for rates to remain in this territory (or better) as long as those realities persist. Be careful with that logic though... While the Fed continues

Mortgage rates are on a tear, with the average lender easily hitting new all-time lows today. How low is that? At this point it's safe to say that anything over 3% is too high as long as we're talking about a top tier scenario. So let's take a moment to discuss what might separate one scenario from another. 1. Loan-to-Value ratio (LTV) As the name implies, it's the ratio of the proposed new loan amount to the value of the home in question (note that the purchase price is used if it's lower than the appraised value). This one of the two most important considerations that determines the pricing bracket your loan quote would fall into. By the time you get an LTV down under 75%, you're paying almost no additional interest, but there's a very important caveat. 2. Credit Score (FICO) This is the

Mortgage rates have fallen more aggressively than ever and they've been remarkably willing to set record after record. So is there any reason you shouldn't wait for them to go even lower? This is an age old question any time rates fall to long-term lows. In the past, the answer has been pretty easy . If rates had fallen more than 1.5% from their previous high over the course of several years, and if something obvious happened to push them just a bit lower, it was time to refi! For example, the Fed's policy shift (in favor of mortgages) in September 2012 and the Brexit vote in 2016 both pushed rates quickly lower. Both were singular events with finite information, that allowed markets to react and move on. Coronavirus has filled this role in a different way. Like past events, it hit a market

Mortgage rates improved nicely overnight. The average lender's morning rates were very close to the lowest levels ever . This was a distinct possibility based on yesterday afternoon's bond market movement. Mortgage rates are most directly influenced by mortgage-backed bonds which trade thousands of times a day. It's not feasible for mortgage lenders to change rate quotes that frequently. Instead, they wait for the market to move by a certain amount before making any changes. By yesterday afternoon, we'd clearly seen enough movement as several lenders had already updated rates for the better. For others, however, it was too late in the day, thus leaving the market improvements to be priced into this morning's rate sheet offerings. The only risk to that gameplan was that bonds could move enough

Mortgage rates did something over the past 3 days that they haven't done since early June . They moved sideways to slightly higher ! At the same time, interest rates in the broader bond market have been flashing a warning that the past 6 weeks of improvement might be meeting some resistance. While that still may turn out to be the case, today was ultimately a victory, but there's a catch. Today was a victory in the sense that the underlying bond market improved enough for most mortgage lenders to offer slight improvements. The catch is that those bond market gains happened gradually throughout the day and we didn't hit the levels that would motivate most lenders until later in the afternoon. By that time, a few of the slower-moving lenders were already past their typical window to make changes

Mortgage rates have been falling so much and with such regularity in 2020 that there's scarcely been a reason (or even an opportunity) to talk about anything else. Now suddenly, we have 2 straight business days with the average lender's rates getting modestly worse. Is this the beginning of the end? Maybe... Probably not, but that's not the point. The point I will continue to make about this record-breaking run into the lowest rate range ever is that it will come to an end at some point. Putting it in those words makes it seem obvious, but you wouldn't know that based on the average prognostication in the media. Most "experts" surveyed by respectable media outlets (hint: an expert mortgage rate forecaster is no more qualified than a precocious 3rd grader when it comes to predicting the future

The bond market saw yet another week with rates in a holding pattern at historic lows. With coronavirus being the primary motivation for rates, it wouldn't be a surprise to see indecision continue until we get a clearer idea of how things will shake out with respect to the pandemic vs the global economy. In fact, apart from the all-time low mortgage rates, things have been downright boring when it comes to the underlying bond market driving those rates. Absent a vaccine-related breakthrough, there's not much for the bond market to do besides hurry up and wait. After all, even if there is amazing news about a vaccine trial, that's only worth a smaller-scale, shorter-term bump for markets until the stuff actually makes it into widespread circulation and proves its worth. Between now and then

Mortgage rates improved almost imperceptibly this morning compared to yesterday afternoon. With that, the average lender was just a hair below the previous all-time lows, but by an amount that's so small as to not really matter to the average mortgage borrower. Perhaps more importantly , after a string of convincingly lower all-time lows, mortgage rates have been struggling to make additional improvements. This mirrors recent improvements in the Treasury market--the benchmark for fixed interest rates in the US. 10yr yields have moved progressively lower since mid-June, but have also struggled to break certain levels. In 10yr Treasuries, for example, 0.58% has been a key point of resistance. That was challenged today, but not convincingly broken (.579% currently). All this is in line with the

Mortgage rates have been holding a very narrow range since July 9th. They also hit new all-time lows on July 9th. A few of the days since then have been slightly better and--less frequently--slightly worse, but any one of them is noticeably better than anything before July 9th. This is the new reality of the mortgage market after coronavirus. It will continue to be the reality until it's not anymore, and the deciding factor there will likely be progress against the pandemic. There are other considerations as well. Chief among these is the correlation between mortgage rates and the broader bond market. When rates first began to fall to all-time lows in March, US Treasuries (our representative of "the broader bond market") moved lower much faster. That didn't matter much to anyone watching mortgage

Markets continue to focus on coronavirus numbers first and foremost. When the news is good , we tend to see stocks and rates move higher. When the news is bad , rates tend to fall and stocks struggle to improve. The movement is usually more pronounced for stocks. When it comes to rates, however--especially mortgage rates--recent volatility is taking place at a microscopic level compared to recent months. This could continue to be the case until we get a much clearer sense of how the pandemic will likely evolve in the context of our attempts to reopen the domestic economy. Until that happens, of all the places to be flying in a relative holding pattern, this is as good as it gets for mortgage rates. When coronavirus first hit the bond market, it was US Treasuries that responded most convincingly

Mortgage rates moved lower this morning as lenders got caught up with recent improvement in the bond market. The bond market is the primary consideration for interest rate levels and investors have remained eager to buy bonds for a variety of reasons--not the least of which being the Federal Reserve leading the way with billions of dollars of bond purchases every day of the week. Stronger buying demand means higher prices and when bond prices rise, rates fall. But in and of themselves, higher bond prices aren't enough to ensure mortgage lenders will offer lower rates. There is only so much capacity in the mortgage lending system. If lenders drop rates too much, too quickly, it can lead to several negative effects. The most obvious and logical effect would be an overloading of lenders' operational

Mortgage rates recovered to some extent today, after moving slightly higher on Friday and yesterday. The bond market (which underlies rate movement) was surprisingly resilient (good for rates) even as stock prices moved up roughly 1%. Rising stock prices frequently coincide with rising bond yields in the shortest of terms. In other words, it's more common to see rates move higher on a day like today. Credit the Fed for much of the resilience. Not only is the central bank continuing to purchase Treasuries and mortgage-backed bonds. They were also out in force today offering broad reassurance about their commitment to continue providing support for financial markets as the economy battles back against coronavirus. Combine that with unacceptably high covid numbers in several states and the we

Mortgage rates definitely hit the lowest all-time lows of all-time last week, at least for conventional 30yr fixed scenarios without many risk-based adjustments. The most recently available Freddie Mac rate survey (which drives a majority of mortgage rate headlines) reported all-time lows as of last Thursday. Indeed, that was still true as of Thursday, but things have changed since then. The change began on Friday for most lenders as the bond market (which drives day-to-day changes in interest rates) began to lose ground fairly quickly. Notably, the weakness followed the best-ever levels in mortgage-backed bonds (which most directly affect mortgage rates). In other words, we had access to the best rates ever on Friday morning , but the average lender has moved slightly higher since then. Context

It should no longer come as a surprise that the pandemic continues to create never-before-seen circumstances in all corners of society. Here in the housing and mortgage markets, one of the first major manifestations of the crisis was a quick move to incredibly low rates. With record after record being set in close succession, the mortgage environment has been ridiculously good for most homeowners. For others, it's just been ridiculous. Record low rates make a lot of sense given the economic outlook. In general, economic weakness coincides with lower rates, and there's been plenty of that to go around. On the other hand , much of the economic weakness is assumed to be temporary . How much is anyone's guess, but until we see where those chips fall, both sides of the market (stocks and bonds)

There are two kinds of headlines about mortgage rates today: those that rely on the weekly survey-based data published each Thursday by Freddie Mac, and those who rely on the actual daily average rate compiled by Mortgage News Daily. In both cases , the headlines can claim new record low rates, but each source is referring to a different instance of all-time lows. for the average lender. Specifically the all-time lows I told you about on Monday are the same all-time lows Freddie Mac is talking about today (Freddie's survey only covers the first part of any given week and tends to heavily favor Mondays). And the all-time lows I'm talking about today are those that have yet to be captured by Freddie's survey. Indeed, they may not be captured at all if rates happen to move up by the beginning

Mortgage rates were unchanged today for the average lender. That means they remain at all-time lows that are even lower than the all-time lows seen during the previous 3 business days. Even so, today's underlying market movement might be a bit of a wake-up call for anyone waiting to lock an interest rate. In general, the decision to lock or float a mortgage rate has had low consequences recently. While that will likely continue to be the case until the coronavirus situation meaningfully improves, it doesn't mean we should fall asleep at the wheel. We need to remain vigilant for signs that the most recent all-time low mortgage rates are the last we'll see for months or years. Today served as a fairly non-threatening wake-up call in that regard--at least for those following the intraday movement

Mortgage rates barely budged for the third straight day, which is welcome news considering they are at all-time lows. The stability comes in spite of at least two important economic reports that would normally push rates unequivocally higher according to past precedent. These include Thursday's big jobs report and a key barometer of the services sector released this morning. Both pieces of data suggested an economic recovery is well underway. Even though there is certainly a lot more ground to cover before anyone would consider the economy to be "mostly restored' to pre-COVID levels, financial markets are usually willing to reward progress toward such goals. While one might be able to make the case that the stock market is doing just that, the bond market (which dictates interest rates) isn