Mortgage rates today, November 2, 2018, plus lock recommendations

Gina Pogol
The Mortgage Reports contributor

mortgage rates today, today's mortgage rates, current mortgage rates

What’s driving current mortgage rates?

Average mortgage rates today changed little despite the news that 250,000 new jobs were created, as reported by the Employment Situation Report for October — many more than the 208,000 expected by analysts. That is great for the economy but not for mortgage rates. However, much of that increase was priced in and expected following a similar report from ADP on Wednesday.

Program Rate APR* Change
Conventional 30 yr Fixed 5.122 5.133 -0.04%
Conventional 15 yr Fixed 4.625 4.644 Unchanged
Conventional 5 yr ARM 4.563 5.037 Unchanged
30 year fixed FHA 4.875 5.886 Unchanged
15 year fixed FHA 4.125 5.079 Unchanged
5 year ARM FHA 4.25 5.49 Unchanged
30 year fixed VA 4.958 5.158 Unchanged
15 year fixed VA 4.188 4.505 Unchanged
5 year ARM VA 4.313 4.715 Unchanged
Your rate might be different. Click here for a personalized rate quote. See our rate assumptions here.

Financial data affecting today’s mortgage rates

While mainly overshadowed by the employment report, today’s financial data are all over the place — the most important — oil, stocks, and Treasuries, contradict themselves and their effects are pretty much a wash.

  • Major stock indexes opened higher and continued to rise (bad for rates)
  • Gold prices rose $3 to  $1,235 an ounce. (That is slightly good 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)
  • Oil prices fell $2 to $63 a barrel (good news for rates because energy prices play a large role in creating inflation)
  • The yield on ten-year Treasuries increased $2 basis points (2/100th of 1 percent) to 3.17 percent. That’s quite bad for borrowers because mortgage rates tend to follow Treasuries
  • CNNMoney’s Fear & Greed Index dropped one point to 6 (out of a possible 100). That score is in the “extreme fear” range (good for borrowers). “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
Verify your new rate (Mar 24th, 2019)

Rate lock recommendation

Friday is not traditionally the best day to lock a rate, and there is little indication to believe that current rates will rise on Monday. Interest rates have been rising overall for some time. If you can get into a better tier, say a 15-day lock instead of a 30-day lock by waiting until Monday, it’s probably a good idea.

In a rising rate environment, the decision to lock or float becomes complicated. Obviously, if you know rates are rising, you want to lock in as soon as possible. However, the longer your lock, the higher your upfront costs. If you are weeks away from closing on your mortgage, that’s something to consider. On the flip side, if a higher rate would wipe out your mortgage approval, you’ll probably want to lock in even if it costs more.

If you’re still floating, stay in close contact with your lender, and keep an eye on markets. I recommend:

  • LOCK if closing in 7 days
  • LOCK if closing in 15 days
  • FLOAT if closing in 30 days
  • FLOAT if closing in 45 days
  • FLOAT if closing in 60 days
Lock in your rate. Start here. (Mar 24th, 2019)

This week

This week will be very busy from the very beginning, with many economic reports to digest as well as pre-election jitters and Twitters.

  • Monday: Personal Income (expected to increase by .1 to .4 percent), Consumer Spending (expected to increase by .1 to .4 percent), and the Core Inflation Rate (expected to increase from zero to .1 percent)
  • Tuesday: Case-Shiller Home Price Index for August (less important because it is older data), Consumer Confidence Index for October (highly important, expected to fall from 138.4 to 136.5).
  • Wednesday: ADP Employment Report (fairly important because many investors believe that it foreshadows the monthly employment data released Friday — previous was 230,000 new payrolls added)
  • Thursday: ISM Manufacturing Index for October (fairly important, predicted drop from 59.8 to 58.8)
  • Friday: Employment Situation Report for October (extremely important, unemployment rate predicted to remain at 3.7 percent, expecting non-farm new payrolls to add 200,000, up from September’s 134,000, and average hourly earnings to increase by .2 percent)

What causes rates to rise and fall?

Mortgage interest rates depend on a great deal on the expectations of investors. Good economic news tends to be bad for interest rates because an active economy raises concerns about inflation. Inflation causes fixed-income investments like bonds to lose value, and that causes their yields (another way of saying interest rates) to increase.

For example, suppose that two years ago, you bought a $1,000 bond paying five percent interest ($50) each year. (This is called its “coupon rate.”) That’s a pretty good rate today, so lots of investors want to buy it from you. You sell your $1,000 bond for $1,200.

When rates fall

The buyer gets the same $50 a year in interest that you were getting. However, because he paid more for the bond, his interest rate is now five percent.

  • Your interest rate: $50 annual interest / $1,000 = 5.0%
  • Your buyer’s interest rate: $50 annual interest / $1,200 = 4.2%

The buyer gets an interest rate, or yield, of only 4.2 percent. And that’s why, when demand for bonds increases and bond prices go up, interest rates go down.

When rates rise

However, when the economy heats up, the potential for inflation makes bonds less appealing. With fewer people wanting to buy bonds, their prices decrease, and then interest rates go up.

Imagine that you have your $1,000 bond, but you can’t sell it for $1,000 because unemployment has dropped and stock prices are soaring. You end up getting $700. The buyer gets the same $50 a year in interest, but the yield looks like this:

  • $50 annual interest / $700 = 7.1%

The buyer’s interest rate is now slightly more than seven percent. Interest rates and yields are not mysterious. You calculate them with simple math.

Verify your new rate (Mar 24th, 2019)

Mortgage rate methodology

The Mortgage Reports receives rates based on selected criteria from multiple lending partners each day. We arrive at an average rate and APR for each loan type to display in our chart. Because we average an array of rates, it gives you a better idea of what you might find in the marketplace. Furthermore, we average rates for the same loan types. For example, FHA fixed with FHA fixed. The end result is a good snapshot of daily rates and how they change over time.