Mortgage rates moved lower again today--this time in a slightly more noticeable way.  More than anything, this was a reflection of last Friday's market movement, which lenders were hesitant to pass along on their rate sheet offerings ("market movement" + "lender-specific factors" = mortgage rates).    As of Friday, the average lender was offering the best rates since August.  As of today, we're seeing the best rates since April.  In other words, the year is ending with the best rates in 8 months.

My comments from last Friday are still relevant:

2 months ago, all hope seemed lost.  Rates were the highest in years and there were few reasons to expect the pain to subside, short of a massive meltdown in stocks or a big picture shift in the economy.  As you're likely aware, stocks indeed tanked heading into the 4th quarter.  And as I've mentioned many times since, that stock weakness was largely responsible for rates' ability to reclaim lost ground.  This raises serious questions for the beginning of 2019 because the economic data and other indicators aren't necessarily looking like they justify all the pain we've seen in stocks.  To whatever extent stocks are able to bounce back, there could some upward pressure waiting for mortgage rates on the other side of the New Year.  To be clear, this isn't a prediction--simply a reminder of the potential volatility ahead.

Bond markets will be closed tomorrow for New Year's Day and mortgage lenders won't be updating rate sheets.  When everyone gets back in the office on Wednesday, market activity and volatility could ramp up quickly.  The week's key event will be Friday's big jobs report at 8:30am E.T.

Loan Originator Perspective

Bond markets posted further small gains today, and rates are at their best levels since February.   Stocks' worst year in a decade surely contributed to our rally.  I'm locking January closings, but waiting on February's, for all but the most risk-averse clients.  Happy New Year! -Ted Rood, Senior Originator

Delayed Christmas gifts continue to appear with lowest rates since early this year. -Al Hensling

Today's Most Prevalent Rates

• 30YR FIXED - 4.625%
• FHA/VA - 4.25%
• 15 YEAR FIXED - 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 are slowly dying down.  The rising rate environment could flare up again, and some headwinds remain in effect, but the broader tone has taken a more optimistic shift.
  
  
• Highest rates in more than 7 years in Oct/Nov.  Lowest rates 8 months by the end of the year.
  
  
• This is a bit of a crossroads.  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, it's one of the more hopeful positions we've been in for several years.

• 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.