Mortgage rates fell modestly today, keeping rates near the lower end of the range seen since January 18th.  The catch is that rates moved sharply higher on the 18th, and from there, you'd have to go back to late December to see anything higher.  Simply put, we're at the lower end of the recently higher range.  Combine that with the potential volatility this week from several important economic reports and there's a good case to be made for "playing it safe" with respect to locking vs floating.

4.25% remains the most prevalent quote on top tier conventional 30yr fixed scenarios.  

Loan Originator Perspective

As of midday Monday we find interest rates not willing to commit in either direction until the major data of Wednesday-Friday.  We may get a hint here and there of the consensus, but until the data hits and the FED speaks, there will not be any major moves.  Of course there's always the surprise headline from the new administration, and as always something new from Europe or Asia, but even that may be short lived.  It is safe to say that locking in, yet again, makes the most sense.  What are the odds we break lower or higher?  Nobody knows, it is too unpredictable to speculate at this point.  Lock em up. -Gus Floropoulos, VP, The Federal Savings Bank

Today is the best day of the last three days for rates.  I was hoping to revisit sub 2.45 today but it’s not in the cards.  If you want to float then you need to hope we break below 2.45 soon or I fear we’ll be moving back toward the higher end of the range.  I’d start getting slightly defensive this week especially considering the amount of data we have on tap.  -Jason B. Anker, Vice President- Loan Officer at Salem Five

With the recent gains of the last couple days, I think it would be wise to lock in here.  We have a lot of data this week which will move the markets one way or the other.   If you plan to float, then you are also hoping for the data to come in weaker than expected or that stocks will continue to move lower based on all the recent politics coming out of D.C.   -Victor Burek, Churchill Mortgage

Today's Best-Execution Rates

  • 30YR FIXED - 4.25%
  • FHA/VA - 3.75%
  • 15 YEAR FIXED - 3.375%
  • 5 YEAR ARMS -  2.75 - 3.25% depending on the lender

Ongoing Lock/Float Considerations

  • Rates had been trending higher since hitting all-time lows in early July, and exploded higher following the presidential election
  • Some investors are increasingly worried/convinced that the decades-long trend toward lower rates has been permanently reversed, but such a conclusion would require YEARS to truly confirm

  • With the incoming administration's policies driving a large portion of upward rate momentum, mortgage rates will be hard-pressed to return to pre-election levels until well after Trump takes office.  Rates can move for other reasons, but it would take something big and unexpected for rates to get back to pre-election levels. 
  • We'd need to see a sustained push back toward lower rates (something that lasts more than 3 days) before anything less than a cautious, lock-biased approach makes sense for all but the most risk-tolerant borrowers. 
  • As always, please keep in mind that the rates discussed generally refer to what we've termed 'best-execution' (that is, the most frequently quoted, conforming, conventional 30yr fixed rate for top tier borrowers, based not only on the outright price, but also 'bang-for-the-buck.'  Generally speaking, our best-execution rate tends to connote no origination or discount points--though this can vary--and tends to predict Freddie Mac's weekly survey with high accuracy.  It's safe to assume that our best-ex rate is the more timely and accurate of the two due to Freddie's once-a-week polling method).