This article’s headline makes the overall mortgage rate situation sound much better than it actually is. While it is indeed a fact that last Friday’s rates were lower than the previous business day’s rates by the widest margin since Brexit, caveats abound. First off, the Brexit move was more than twice as big. Today’s move is only slightly better than a handful of other decent days over the past 5 months.
The post-Brexit move also occurred when rates were already fairly low. In fact, rates were near all-time lows already, and had been moving almost exclusively lower all year. In stark contrast, today’s improvement comes on the heels of one of the sharpest moves higher in history. It’s fairly normal to see a decent-sized correction after a huge spike higher.
Finally, there’s the simple market dynamics surrounding the Thanksgiving holiday. Bond markets (which drive mortgage rates) are subject to increased potential volatility on Thanksgiving week. Because of this, mortgage lenders tend to play it safe and build some extra margin into rate sheets. In other words, lenders generally set rates higher than they otherwise would have on Wednesday and Friday (think “cushion”). As such, rates are benefiting not only because bond markets have improved, but also because lenders can remove the cushion.
Bottom line: it was a great individual day for rates, but we’re still very much in the “new normal” range of conventional 30yr fixed rates between 4% and 4.25%.
Some of the latest, local mortgage rates according to Bankrate.com are:
|Wilson Bank & Trust||4.145%|
|Pinnacle National Bank||4.275%|
|First South Bank||4.144%|
* The above mortgage loan information is provided to, or obtained by, Bankrate. The rate is based on 30 year fixed rate mortgage and a loan of $300,000. Rates change often and your personal rate may differ from the above number based on your qualifications. To see more rates from Bankrate, click here.