Mortgage rates rose again today, bringing them further into the highest levels of the year.  If there's anything redeeming about the move it's that it wasn't nearly as abrupt as yesterday.  In fact, several lenders were fairly close to yesterday's offerings.  The average lender is back up to 4.375% on top tier conventional 30yr fixed quotes.  A few remain at 4.25% and some are already up to 4.5%.

Bond markets (which underlie rate movement) are feeling pretty pessimistic right now, primarily due to the recent and rapid increase in Fed rate hike expectations.  Beyond that, things like economic data have the potential to drive nails deeper into coffins.  We saw stark evidence of that with Yesterday's ADP employment numbers (much stronger than expected) fueling speculation for a similarly strong performance from tomorrow's big jobs report.  We can assume that there's more room for rates to move higher if the jobs report validates those fears (or "hopes," if you want to look at it from an economically positive standpoint), but we could catch a temporary break if job creation is weaker than expected.

Loan Originator Perspective

Another day, another small step towards higher rates.  I almost expect daily losses now, which is never the ideal scenario.  Even though the 10 year treasury auction posted typical results, they weren't enough to generate follow through bond demand.  Locking early remains the smart option as far as I'm concerned.  The trend is still NOT our friend.  -Ted Rood, Senior Originator

We have the all important Jobs Report tomorrow with indications it could be a strong number based on a much higher ADP report yesterday.  While it's likely that this has been priced into current levels rate pressure has been higher virtually every day for well over a week.  This might make you think we're due for a bounce lower and while that is always possible I think the trend is not our friend at the moment and locking your rate at application makes the most sense.  Protection and just "hope for the best" makes the most sense to me. -Hugh Page, Mortgage Banker, SeacoastBank

Today's Best-Execution Rates

  • 30YR FIXED - 4.375%
  • FHA/VA - 4.0-4.25%
  • 15 YEAR FIXED - 3.5-3.625%
  • 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).