Mortgage Rate Watch
Mortgage Rates Hit New 4-Year Highs

Mortgage rates continued higher today following the release of the Minutes from the Federal Reserve's (aka "The Fed") most recent policy meeting.  The Fed was slightly more upbeat than markets expected, saying that most members agreed that a stronger economy increased the likelihood of further rate hikes.  Although the Fed Funds Rate doesn't directly dictate mortgage rates, there is plenty of long-term correlation.  Because the Fed only meets 8 times a year to adjust rates (and rarely adjusts rates on all 8 occasions), bond markets (which include mortgage rates) are constantly adjusting to what the Fed will probably do in the future.

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Mortgage Rates Unable to Extend Last Week's Gains

Mortgage rates moved back up today after ending last week on a positive note.  Improvements in rates have been uncommon so far in 2018.  In fact, we haven't seen more than 2 consecutive days without a move higher.  In that sense, today keeps the prevailing trend intact.  If there's a saving grace, it's that rates didn't quite rise back above last week's highs.

If there's a downside (whatever the opposite of a "saving grace" might be...), it's that rates remain in line with the highest levels in more than 4 years.  

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Mortgage Rates Catch a Break Before Long Weekend

Financial markets in the US will be closed for President's Day on Monday. Thus, mortgage lenders will not be open, nor will they be accepting locks. Given that mortgage rates took the road less traveled in 2018 and actually moved lower, it's worth having a chat with your mortgage professional if you have a loan in process. 

Of course, many of you may not be reading this until after the lock window has passed for today, so let's take a look at next week's risks and opportunities.  The biggest risk is the same one that's been with us all year.  Simply put, rates have been trending higher in a steady but highly convicted fashion, quickly adding a half a percentage point or more to the average 30yr fixed rate quote.  As we've been saying all year, it doesn't make sense to bet against that trend until it shows clear signs of cooling, and today's modest improvement doesn't cut it.

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Rates Hold Steady Despite Stock Gains

Mortgage rates were roughly unchanged today.  Some lenders even offered improved rates in the afternoon as underlying bond markets managed to hold modest gains.  All this despite another winning day for stocks (5th in a row now).  Much has been made of the interaction between stocks and bonds since last week's stock market flash crash.  Unfortunately many of the correlations mentioned in the news are fairly black and white.  

For instance, many people believe that stock prices and bond yields move higher together because a growing economy not only implies stronger stock performance, but it can also support higher rates.

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Things Just Keep Getting Worse For Mortgage Rates

Mortgage rates surged higher today, moving easily to new 4-year highs.  Today's average conventional 30yr fixed rate is roughly one eighth of a percentage point higher than Wednesday of last week and more than half a point higher than the best rates seen in January.  A half point increase would cost roughly $90/mo in terms of monthly payments on a $300k loan.  In terms of actual "note rates" being quoted, 4.625% is now replacing 4.5% as the most prevalent quote on top tier scenarios.  That said, it's worth noting that there's a fair amount of variability from lender-to-lender and day-to-day at the moment.  This is typical for market conditions we're currently enduring.

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