Mortgage rates were steady to slightly lower today, even though bond market movement suggested a move higher.  That's interesting because mortgage rates are driven primarily by bond market movement.  It's not common to see the two moving in the opposite direction.  So what gives?

In today's case, the discrepancy is pretty easy to explain.  Bonds and rates both improved fairly substantially yesterday.  Bond markets improved a bit more in the afternoon and most lenders didn't have the time or the will to react with rate sheet improvements.

The late day bond market gains also set a high bar for today's measurement of improvement.  In other words, today's "day-over-day change" looks worse than it is, simply because yesterday's closing levels were so good.  A more holistic view shows the bonds underlying mortgage rates held in line with most of yesterday's range for most of today.  With that in mind, it's really no surprise to see mortgage rates hold steady.

The bigger question, however, is where they go from here.  The 2nd half of the week brings several big-ticket economic reports.  These always have the potential to move markets.  In addition we'll get the Minutes from the most recent Fed meeting tomorrow.  Although the Minutes are merely a more detailed account of the Fed meeting from mid-March, they can nonetheless cause significant volatility for rates.  

Loan Originator Perspective

Bonds have managed a nice rally to start off April.   If you have been floating since last week, I think it is wise to go ahead and lock in now if within 30 days of closing.   It seems we have hit the bottom of our range and have been unable to break through.  Plus, we have some high impact data coming later this week and I would not be surprised if investors sold off bonds heading into the data.  -Victor Burek, Churchill Mortgage

Today's Best-Execution Rates

  • 30YR FIXED - 4.125%
  • FHA/VA - 3.75-4.00%
  • 15 YEAR FIXED - 3.375-3.5%
  • 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.