|Rates Hold Near Longer-Term Lows; Volatility Risks Remain
December 28, 2018
Mortgage rates surged lower last week and then spent this week largely holding steady. Holiday market closures and volatility in related markets made for some excitement and uncertainty at times. But for the most part, the market for mortgage-backed securities (the stuff that trades on wall street and beyond that actually determines mortgage rates) is far enough removed from the stock market to avoid major drama.
As was the case last week, we continue to wait on next week’s big jobs report to take the first stab at getting a ball of momentum rolling in 2019.
-Matt Graham, Mortgage News Daily
30 Year Fixed Rate Mortgage
Week in Review
Rates shown below are based on the 30 Year Fixed Rate Mortgage
Friday, December 21, 2018 : 4.65% (+0.01%)
Mortgage rates were steady to slightly higher yet again today. This reinforces our sense from yesterday that rates may have already found their post-Fed floor. The thing that makes today’s modest weakness somewhat surprising is the fact that underlying bond markets actually suggested rates could improve.
More detail: “Mortgage Rates Modestly Higher Despite Stronger Bond Market”
Monday, December 24, 2018 : 4.65% (+0.00%)
Mortgage rates did nothing interesting today, as is typical for the days before and after a major holiday. Tangentially related and significantly more interesting is the President’s criticism of the Fed and Fed Chair Powell. I think this is very much worth discussing around the holiday table (not politics, but rather, fiscal and monetary policy’s effect on interest rates).
More detail: “Trump Vs The Fed: A Public Service Announcement”
Wednesday, December 26, 2018 : 0.00% (+0.00%)
Mortgage rates were unchanged in some cases today and higher in others. The discrepancy is a result of the timing of today’s market movements. The most important thing to know is that lenders who are unchanged today will almost certainly be higher tomorrow, unless the bond market stages an impressive comeback between now and tomorrow morning.
More detail: “Mortgage Rates Higher Today or Tomorrow”
Thursday, December 27, 2018 : 4.64% (-0.01%)
Mortgage rates were unchanged to slightly lower today, which is a major victory considering how yesterday left off. Specifically, bond markets had weakened significantly in the afternoon. Weaker bonds coincide with mortgage lenders raising rates, but only if there’s enough weakness early enough in the day. Yesterday’s pace resulted in some lenders raising rates right away while others put it off until this morning.
More detail: “Mortgage Rates Stay Steady “
Friday, December 28, 2018 : 4.63% (-0.01%)
Mortgage rates moved lower by an almost imperceptible amount today. The improvement was enough to bring the average lender to the lowest levels since the end of August, 2018. In other words, these are the best rates in 4 months. 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 away, 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.
More detail: “Mortgage Rates End 2018 at 4-Month Lows”