Just one day after hitting the lowest levels in more than a month, mortgage rates bounced higher today.  For all intents and purposes, rates fell on Monday morning as the weekend produced no meaningful updates on the recent healthcare bill.  Now today, Speaker Ryan and several unnamed sources have confirmed that the bill remains a priority for the House and they want to "get it right" without putting a timeline on it.  That means Monday's rate improvements no longer have the same justification.  As such, rates shot quickly back into last week's range.

In addition to the updates on the healthcare bill, a top Fed official confirmed that 3 rate hikes are likely in 2017.  This added additional weakness to bond markets (which dictate today's interest rates).  Almost every lender recalled the morning's initial rate sheets and "repriced" to higher rates in the afternoon.  Whereas 4.125% had been just become the most prevalent conventional 30yr fixed quote for top tier scenarios as of yesterday, today brings us back to 4.25%.  Not every lender will be quoting different rates.  Those who are quoting the same rates will instead be charging higher upfront costs (thus raising the effective rate).

This abrupt change in bond markets is the biggest day of losses since the recent positive trend began in mid-March.  It's the most compelling motivation for fence-sitters to consider locking that we've seen since then. 

Loan Originator Perspective

The benchmark 10 year note has been unable to make new lows today.  So, like yesterday, I think it is wise to look at locking in today if you are within 30 days of funding.  Only loans I would consider floating are those that can lock on a shorter term tomorrow such as a 15 day lock. -Victor Burek, Churchill Mortgage

Looks like bonds' recent rally may be nearing a pause, and pricing worsened slightly today.  A number of lenders issued 2nd rates this PM, as this morning's gains evaporated.  It's not surprising that the rally stalled, in fact, it was inevitable.  Floating borrowers have a choice, grab the improvement they've seen while floating, or hope for more.  I locked several deals today, think we're at best pricing we'll see for at least a few days. -Ted Rood, Senior Originator

Today's Best-Execution Rates

  • 30YR FIXED - 4.25%
  • FHA/VA - 3.75-4.25%
  • 15 YEAR FIXED - 3.5-3.625%
  • 5 YEAR ARMS -  2.75 - 3.25% depending on the lender

Ongoing Lock/Float Considerations

  • 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

  • Still, it would take something very big and unexpected for rates to make a big, sustained push back toward pre-election levels.   Even then, it would take time to confirm such a shift.
  • With fiscal and monetary policy paths both clearly putting pressure on rates, at least one of those would need to make a noticeable change before anything but a cautious, lock-biased approach makes sense as a baseline strategy.  Floating should only be considered as a tactical opportunity to capitalize on temporary corrections. 
  • Rates discussed refer to the most frequently-quoted, conforming, conventional 30yr fixed rate for top tier borrowers among average to well-priced lenders.  The rates generally assume little-to-no origination or discount except as noted when applicable.  Rates appearing on this page are "effective rates" that take day-to-day changes in upfront costs into consideration.