Mortgage Rate News

At the end of last week, the average top-tier 30yr fixed mortgage rate quote was 4.375%. As of today, the exact same scenario would be at 4.125%--a quarter of a percentage point lower. That's an uncommonly big move for a single week, but it's one we've been tracking eagerly in recent days. Why is it happening? The first phase of the move had to do with the Fed's surprisingly friendly policy announcement on Wednesday. Due to the time of day that the Fed news came out, markets didn't have a chance to fully react to it until yesterday. Even so, the drop in rates was already much bigger than average. But this morning took it to the next level. In the middle of the night (in the US, anyway), economic data for Europe was released that showed a serious slowdown in German and French manufacturing.

Granted, we're not back to the sub-4% mortgage rates that dominated much of the past 8 years, but breaking into the high 3% range is a valid consideration after the past few days. Yesterday's surprising Fed news hit the rates that were already holding near their lowest levels in well over a year. The net effect has been a decisive break lower with the average lender easily able to offer 4.375% on a typical 30yr fixed scenario. Many lenders are at 4.25%, and the interesting thing about 4.25% is that it currently doesn't cost much more to buy your way down to the next lower rate: 4.125%. All of the above has to do with the upfront prices associated with interest rates. For instance a lender is going to earn more money from a 4.375% rate than a 4.25% rate, so they're willing to pay a bit more

Mortgage rates broke a week-long streak of silence today following a policy announcement from the Federal Reserve. Even before today's Fed announcement, we knew we'd likely be seeing a move in rates. We just didn't know in which direction, or at what pace. As it happens, we were treated to the best case scenario on both accounts (i.e. rates moved lower at a fast pace). As we discussed yesterday, it was the Fed's balance sheet that got most of the attention from financial markets. This refers to the Fed's loan portfolio consisting of Treasuries and mortgage-backed-bonds (both forms of loans that entitle the Fed to collect interest and principal payments). As those payments came in, the Fed had previously been putting the money back into new loans (buying new bonds to replace the old ones). They

Mortgage rates were flat for the 4th day in a row today in a sign that investors have largely taken their seats for tomorrow's big show. The Fed will release its new policy statement at 2pm tomorrow, and while they're not expected to hike rates this time around, there are other important considerations that could have a big impact on rates. One of the considerations is the fact that March is one of the months where the Fed updates its economic projections. Investors largely tune-in to these for a glimpse at the collective rate hike outlook. This has caused big market movement in the past, but something else could be even more important tomorrow. The Fed has increasingly mentioned the impending end of its balance sheet runoff , which refers to its policy of NOT buying bonds with the money it

Mortgage rates didn't budge today--a logical result with no signs of life in underlying bond markets. In the current case, this is just fine with us considering the bond market has gone silent while remaining at the best levels in 14 months. Specifically, mortgage-backed-securities (MBS, the most important ingredient in determining mortgage rates) are at 14 month highs. When MBS are higher, rates are lower (14-month lows in this case). 10yr Treasury yields, on the other hand, spent a few hours at stronger levels on January 3rd, 2019. The only reason I bring up the modest discrepancy between Treasuries and MBS is to illustrate a point that we should keep in mind this week. Treasuries are capable of moving much more quickly than mortgage rates. That's why Treasuries made it to lower rates in

Mortgage rates remained at recent lows today, as underlying bond markets strengthened. For US Treasuries, this brought rates to new multi-month lows. Mortgage-backed bonds, on the other hand, simply returned in line with the best levels of the week. That allowed mortgage lenders to continue offering the best rates of the week (also the best rates in more than year!). For most of 2019, rates have remained locked in a narrow range . The past few days have done more than any others to challenge that range, but it will likely take friendly words from the Fed next Wednesday to fuel any further improvement. With that in mind, I'd say that much of the recent strength in rates is based on hopes for friendly central bank policies . There's always a risk that the Fed isn't quite ready to say what markets

Mortgage rates held steady today, despite moderate weakness in underlying bond markets. This occurred for two reasons. First, yesterday saw bond markets improve, but not by enough for lenders to adjust rates lower in the middle of the day. Second, today's bond market weakness happened gradually throughout the day and was thus not big enough to prompt a mid-day rate change from lenders. The implication is that rates would likely be very slightly higher tomorrow if bond markets were to hold steady overnight. By remaining in current territory, rates are also remaining at the lowest levels since January 2018 . The average lender can now offer conventional 30ry fixed rates of 4.375% on top tier scenarios. FHA rates are a quarter point lower (or more, depending on the lender), but they carry mandatory

Mortgage rates were officially lower today, despite some weakness in the bond market. In general, bond market weakness coincides with rates moving higher. This time around, the weakness was minimal, and mortgage lenders had a bit of catching up to do with respect to yesterday's bond market gains. The changes were very small for the average lender, but they technically result in yet another long-term low (best rates since January 2018). Clouds began to roll in by the end of the day in response to a glut of news out of the UK. As expected, British politicians voted to avoid exiting the EU without some sort of deal. On a somewhat unexpected note, there seems to be a quickly growing consensus that a different brexit compromise deal has enough support to pass, or at least to come much closer than

Mortgage rates dropped convincingly today, bringing them to new long-term lows. The average lender hasn't offered anything lower for more than a year (January 2018). The improvement came on a combination of news headlines, economic data, and the scheduled sale of US 10yr Treasury debt. The news headlines in question pertain to Brexit. To oversimplify a complicated topic, there had been some hope for a compromise Brexit deal overnight. Such a deal would ease some concerns about uncertain market outcomes. That uncertainty has helped keep rates lower , so clearing it up meant upward pressure on rates. As the day progressed, however, the compromise deal fell apart, and rates moved lower accordingly. Economic data also has an impact on rates. In this case, it was the Consumer Price Index (an inflation

Mortgage rates were roughly unchanged to begin the week. That means they are staying in line with the lowest levels in more than a year. Only 2 or 3 days have been any better, depending on the lender, and the differences are minimal. It's refreshing to see rates near long-term lows after somewhat of a scare 2 weeks ago. Heading into March 1st, rates rose at their quickest pace in more than a month. In so doing, they were also potentially breaking out of a sideways range that had dominated most of 2019. When rates break such ranges, it's not uncommon for them to keep moving in the direction of the break. In other words, we may have been looking at the beginning of a bigger move toward higher rates. Thankfully, last week saw a complete reversal of the negative momentum. This restored the previous

Yesterday, we talked about how mortgage rates were actually lower this week, despite some news coverage to the contrary, and how that discrepancy was the result of a logical misunderstanding. Today takes the discrepancy to another level as rates fell even farther. The average lender is very close to offering the lowest rates seen in over a year. In fact, if we're talking about the "note rate" (the actual interest rate applied to a mortgage balance), we're at the lows already. It's only when we consider the upfront costs that today's overall rate/fee scenarios aren't quite there yet. Let's not split hairs though: rates are effectively as good as they've been in a long time. There are multiple factors behind the friendly move and there are multiple landmines in the weeks ahead. These will be

Mortgage rates dropped noticeably today, as the underlying bond market benefited from overseas developments. The European Central Bank (ECB) is Europe's counterpart to the Federal Reserve. Like the Fed, they've also dabbled in bond-buying and ultra-low policy rates. In fact, they still haven't gotten around to hiking rates as a part of the current global economic expansion. Just today, they said they don't expect rates to rise in 2019 and possibly beyond. Combined with several other comments and updated forecasts, the message from the ECB was that the European economic outlook is downbeat and they'll be keeping the monetary punchbowl on the table as a result. Central banks' easy money policies tend to benefit bonds (which translates to lower rates ) and these were no exception. The net effect

Mortgage rates improved again today, bringing them back to the lowest levels seen since last Thursday morning. Starting last Wednesday, we saw a fairly fast rate spike through the end of the week followed by 3 days of relative calm so far in the current week. The average lender has a bit farther to go to get back to the lowest of the recent lows seen at the beginning of last week. Whether or not they're able to get there may depend on the next two days of important scheduled events. These include a policy announcement from the European Central Bank (ECB) tomorrow morning and the release of the big jobs report on Friday morning. In general, the more downbeat and cautious the ECB is about the economic outlook, the better it is for rates. The effects would be felt primarily in Europe, but US markets

After a pretty rough conclusion last week, yesterday's stability was a welcome change for mortgage rates at the start of the new week. Today made things slightly better as the average lender improved modestly. This puts today's rate quotes back in line with those seen last Thursday afternoon. More importantly, rates managed to hold their ground despite the presence of strong economic data this morning. Whether we're talking about the Fed or the average bond market investor, most everyone is intently focused on the economy at the moment--waiting to see if it will reaccelerate or begin to show signs of weakness. A strong economy generally puts upward pressure on rates and vice versa. Today was important because it broke that mold. Rates improved in the middle of the day even after the strong

Mortgage rates finally caught their breath today after rising quickly in the second half of last week. Specifically, the average lender managed to avoid getting any worse. Considering the past few business days, that's a victory. But is it as much of a victory as the underlying bond market suggests? Bonds dictate mortgage rates. They are the raw ingredients that lenders use to determine mortgage quotes. Whereas bonds change in value hundreds to thousands of times a day, lenders only update their published rates once a day. From there, if a certain threshold of bond market movement is met, lenders can issue new rate sheets, but this may happen 1 or 2 times a day at best, outside of extreme circumstances. With all of the above in mind, the bond market suggests rates should be lower today. 10yr

Mortgage rates surged again today as the underlying bond market continued to capitulate to selling pressure. Let's talk about what that means in plain English! Capitulation in financial markets refers to investors on one side of a trade gradually becoming overwhelmed by the momentum on the other side. Since Wednesday, several developments began adding momentum to the "higher rates" side of the bond market trading environment. Individually, none of these factors necessarily spelled doom, but their combined effect has been more noticeable. Even then, we likely wouldn't be seeing as big of a move were it not for the fact that rates have been moving in a narrower and narrower pattern. Such consolidation patterns often give way to breakouts that carry more momentum than average. It's not unfair

Mortgage rates moved quickly higher today following stronger-than-expected economic data. Rates are driven by the bond market. Bonds are safe-haven assets. When the economy is stronger, investors are less likely to to buy safe-haven assets. As demand for bonds drops, it's the same as investors demanding higher rates of return before buying. In other words, it all adds up to the end user needing to pay a higher rate. Today brought the release of two economic reports and both were strong . First up was the 2nd revision of Q4 GDP. Investors were prepared for this to fall short of analysts' expectations due to the government shutdown and other year-end headwinds. Instead, it beat the forecast by 0.3% (2.6 vs 2.3 forecast). After that, a closely watched regional business survey from the Chicago

At one point today, there were three apparently important events dominating the newswires simultaneously. These included the Fed Chair's congressional testimony, the Cohen congressional testimony, and--you guessed it--congressional testimony from Lighthizer on US/China trade policy. Mortgage rates are determined by the bond market, and the bond market could make a case for caring about any of these three events. Interestingly enough, almost all of the day's bond market movement arrived BEFORE any of the testimonies. Unfortunately, the movement in question was bad for rates , but the damage was fairly minimal. The average lender is still able to quote the same rates as yesterday, but the upfront costs would be slightly higher. Tomorrow, rates will have another chance to pay attention to the

Whereas mortgage rates were almost undetectably higher yesterday, they were lower by roughly the same insignificant amount today. In either case, and unless they make a much bigger move, they're generally hanging out near the lowest levels in more than a year. For the sake of context, if we're talking about the rate range prior to January 2018, today's rates would be the highest since April 2014 by a wide margin. Today's big to-do was the congressional testimony from Fed Chair Jerome Powell. The Federal Reserve had an active week of communications last week, with numerous members talking about the Fed's plans to make a fairly important change that would affect its bond buying policies (and thus, mortgage rates). Rather than shed any light on that discussion, Powell kept it general and simply

Mortgage rates were very nearly unchanged today, although the average lender was just slightly higher. Investors reacted to news over the weekend that the US/China tariff deadline would be extended. While that doesn't have anything to do with mortgage rates, it set market forces in motion that created the modest, indirect effect. The looming tariff deadline had been a source of uncertainty for markets. All other things being equal, uncertainty tends to promote some safe-haven buying in bonds and some weakness in stocks. When investors are buying more bonds, it helps push rates lower (or keep them from going higher). Of course, this uncertainty trade must be balanced against a variety of other considerations for investors. Moreover, the news in question wasn't a solution to the trade negotiations