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 early 2019 whereas MBS didn't have time to react by comparison. 

Something similar could happen on Wednesday afternoon following the Fed Announcement.  It could happen for better or worse.  In the case of a friendly rate reaction, expect mortgage lenders to take some time before being able to adjust rate sheets in your favor, and even then, it may not match the move seen in 10yr Treasuries.  In the case of higher rates, you can use Treasuries as a cue for additional upward movement that could show up on Thursday morning in mortgage rates.  Either way, we'll be discussing the post-Fed move in much greater detail in 2 days.

Loan Originator Perspective

Bond markets were decidedly flat, as traders eye Wednesday's looming Fed Statement.  It's unlikely we'll see any significant movement before the report hits Wednesday.  It's highly unlikely Fed will change their benchmark overnight rate, but their comments on economic growth and inflation will inform interest rates.   I'm locking loans closing within 30 days. -Ted Rood, Senior Originator

Today's Most Prevalent Rates

• 30YR FIXED - 4.375%
• FHA/VA - 4.0-4.125%
• 15 YEAR FIXED - 4.0 - 4.125%
  
• 5 YEAR ARMS -  4.25 - 4.625% depending on the lender

Ongoing Lock/Float Considerations 

• Headwinds that had plagued rates for most of the past 2 years began to die down in late 2018.  A rapid decline in the stock market certainly helped drive investors into bonds (which helps rates) Highest rates in more than 7 years in Oct/Nov.  8-month lows by the end of the year
  
  
• This is a bit of a crossroads. The rising rate environment could flare up again.  We may look back at Oct/Nov and see a long-term ceiling, or we may look back at early December and see a temporary correction before more pain. 
  
  
• Either way, late 2018 was a sign that rates are willing to take opportunities presented to them.  From here, it will be up to economic data, fiscal policies, and the stock market to decide on the next set of opportunities.  The rougher the overall outlook, the better interest rates tend to do.

• 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.