Mortgage rates fell today despite relatively uneventful movement in underlying bond markets (which drive day to day changes in rates).  The net improvement can be explained by the timing of yesterday's improvement.  Simply put, bonds improved late in the day (following the 2pm release of the Fed Minutes).  That market improvement was too late in the day for some lenders to reissue rate sheets.  Lenders who DID improve yesterday afternoon nonetheless held back just a bit, as it's customary to make sure late day market gains stick around the following morning before fully adjusting rate sheets to reflect the gains.  

For the average borrower at the average lender, this equates to a modest reduction in the upfront costs associated with the same old rates that have been in play all week.  Most lenders continue quoting conventional 30yr fixed rates in the 4.0% range on top tier scenarios.

Tomorrow morning brings the week's most significant economic data in the form of GDP and Durable Goods.  Neither of these will necessarily cause any drama for mortgage rates, but if they fall far from economists' expectations, they certainly could push rates off their flat trajectory.  Otherwise, it looks like we're on cruise control heading into the 3-day weekend (markets and mortgage lenders are closed on Monday in observance of Memorial Day).

Loan Originator Perspective

With the 3 day weekend coming and a short day tomorrow, if you plan to lock this week, today is your day.   Bonds have nice support just above current levels, so I would favor floating until Tuesday.   If you are risk adverse, or cannot afford a higher rate, then I would go ahead and lock in today.  -Victor Burek, Churchill Mortgage

Bond traders apparently started their Memorial Day hiatuses early, as markets were unchanged at mid day.  We're still near 2017's best pricing, and looks like bonds are quite content to remain in the current range.  Tomorrow will likely be even more sedate than today, appears to be limited risk/benefit to floating here.  Folks within 30 days of closing should consider locking, unless they enjoy bond market "action"/gambling.   -Ted Rood, Senior Originator

Today's Best-Execution Rates

  • 30YR FIXED - 4.00%
  • FHA/VA - 3.75%
  • 15 YEAR FIXED - 3.25%
  • 5 YEAR ARMS -  2.75 - 3.25% depending on the lender

Ongoing Lock/Float Considerations

  • Investors were relatively convinced that the decades-long trend toward lower rates had been permanently reversed after Trump became president, but such a conclusion would require YEARS to truly confirm

  • Instead of continuing higher in 2017, rates instead formed a narrow, sideways range, and held inside until April.  Investor perceptions are shifting such that fiscal reforms and other policy developments will need to live up to expectations in order to push rates higher.  Geopolitical risks would also need to avoid flaring up (more than they already have)
  • For the first time since the election, we're in a rate environment where you wouldn't be crazy not to lock at every little opportunity/improvement.  Until/unless it's broken, the highest rates of early-2017 mark the ceiling, and we're now waiting to see how much lower we can go from here.
  • 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.