Have Mortgage Rates Gone as Low as They Will Go?

Average mortgage rates hit a new all-time low last Friday. Remember, that doesn't mean they will be the same for everyone. But, overall solid borrowers searching for the right type of loan should be very excited according to industry experts.





This downward path may continue over time, however some insiders are saying we will see a blip or two of rates bouncing back up slightly in the coming days or weeks.


Where Do the Average Rates Sit Today by Loan Program?



  • Conventional 30 yr Fixed 3.375

  • Conventional 15 yr Fixed 3.125

  • Conventional 5 yr ARM 3.5

  • 30 year fixed FHA 2.75

  • 15 year fixed FHA 2.75

  • 5 year ARM FHA 3.875

  • 30 year fixed VA2.5

  • 5 year fixed VA 2.75

  • 5 year ARM VA3.6252.84Unchanged


For those with strong credit and a willingness to shop around, rates in the 2s could be a real possibility. Of course, not everyone will find rates so low. As always, your mortgage rate depends on the strength of your application and which lenders you shop with. The best borrowers are ones with high credit scores, little debt, solid equity. With a willingness to shop around they can be scoring impressive deals. Especially with the national average at 3.28% listed by Freddie Mac.


The 2.5% “Conquest” loan program has just been announced by United Wholesale Mortgage (UWM), a firm based in Pontiac, MI (that works through mortgage brokers instead of dealing with the public directly). This is significant for a couple of reasons: First, 30-year fixed, mortgages at 2.5%. Second, UWM is a big player in the mortgage universe.


The importance of the 2.5% loan is that it sets a new standard in the industry. While we may not see others immediately follow suit, this is likely to spur competition.


If you have strong credit, little debt and solid equity with a willingness to shop around, interest rates in the 2s could be a real possibility for you.


What Drives Mortgage Rate Fluctuation?


  • Major stock indexes soared higher. (Bad for mortgage rates.) When investors are buying shares they’re often selling bonds, which pushes prices of those down and increases yields and mortgage rates. The opposite happens when indexes are lower

  • Gold prices nudged lower to $1,748 an ounce from $1,751. (Neutral for mortgage rates*.) In general, it’s better for rates when gold rises, and worse when gold falls. Gold tends to rise when investors worry about the economy. And worried investors tend to push rates lower. But if they’re not worried now …

  • Oil prices rose to $32.87 a barrel from $28.70 (Bad for mortgage rates* because energy prices play a large role in creating inflation and also point to future economic activity.) 

  • The yield on 10-year Treasurys jumped to 0.68% from 0.62%. A year ago, it was at 2.40%. (Bad for mortgage rates.) More than any other market, mortgage rates normally tend to follow these particular Treasury bond yields, though much less so recently

  •  CNN Business Fear & Greed index moved higher to 48 from 38 out of a possible 100 points. (Bad for mortgage rates.) “Greedy” investors push bond prices down (and interest rates up) as they leave the bond market and move into stocks, while “fearful” investors do the opposite. So lower readings are better than higher ones

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