Mortgage rates haven’t been this low for this long in years–3.5 years to be exact. Brexit was the talk of the town in the middle of 2016 and it resulted in rates very close to all-time lows for well over 3 months (all of July, Aug, Sept). Although rates aren’t quite as low this time around, they average lender is still quoting 3.5% or lower on top tier scenarios. That’s only happened on a consistent basis in 2016 and 2012. Moreover, the current stint is approaching a month in length. Combine that with the fact that rates haven’t been over 3.875% since the middle of 2019, and the current mortgage environment is more than worthy of being viewed in the same legendary light as 2012 and 2016.
In 2012 it was the European crisis and massive central bank bond buying. In 2016 it was Brexit and massive foreign central bank bond buying. In 2019/2020, it’s been the trade war and coronavirus with the latter getting the nod for 2020’s lowest rates. As such, it’s no surprise to see a spike in bad news relating to coronavirus leading to today’s big market moves (which in turn helped rates improve on yesterday’s already great levels. History suggests this could go on for months, but history also suggests it might not. If you’re considering buying or refi’ing and you choose to wait for even better rates (not necessarily something that makes a ton of sense at current levels), make sure you have a game plan in place with your trusted mortgage pro.
Loan Originator Perspective
Bonds shrugged off a robust manufacturing report this AM, continuing their slow but steadfast trudge higher. My pricing improved marginally over Wednesday’s. There’s no meaningful economic data on tap tomorrow, so doubtful rates will change significantly. I’m locking most March closings, floating most beyond that. – Ted Rood, Senior Originator
Today’s Most Prevalent Rates For Top Tier Scenarios
- 30YR FIXED – 3.375 – 3.5%
- FHA/VA -3.25%
- 15 YEAR FIXED – 3.125-3.25%
- 5 YEAR ARMS – 3.25-3.75% depending on the lender
Ongoing Lock/Float Considerations
- 2019 was the best year for mortgage rates since 2011. Big, long-lasting improvements such as this one are increasingly susceptible to bounces/corrections, but 2020’s coronavirus outbreak has provided a second wind for low-rate momentum
- Fed policy, trade negotiations, and the 2020 presidential election will all play a part in driving rate momentum as the year progresses.
- The Fed and the bond market (which dictates rates) will be watching economic data closely, both at home and abroad to see just how much of an impact coronavirus will have. Once it looks like that impact is waning, we could see sharp upward pressure in rates (unless another rate-friendly variable steals the show).
- 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.