Mortgage rates remained relatively unchanged again today.  This continues the sideways trend leading into Memorial Day weekend.  As the current week progresses, we can expect to see volatility increase thanks to the presence of more significant economic data.  

In general, bond markets (which underlie mortgage and other rates) react to strength or weakness in economic data.  The more important the report and the bigger the margin by which it misses or exceeds expectations, the more movement is implied in bond markets (and thus "rates").  

Friday brings the most important economic report of the month: the Employment Situation.  This is the big "jobs report" that includes nonfarm payrolls (a measurement of how many jobs the economy is adding or losing) as well as the unemployment rate.  In modern economic history, this report has the biggest potential to move rates--at least when it comes to "economic reports."

Of course there are other considerations for interest rates and broader financial markets.  They just don't adhere to a schedule and framework of forecasts like the econ data.  We're talking about things like geopolitical risk, fiscal policy headlines, and speeches from various members of the Fed.  All of the above could come into play over the next 3 days.  At the very least, we can assume there's greater potential for rates to see some volatility.

For what it's worth, being "sideways" at current levels wouldn't be anything to complain about.  Only a handful of days since the presidential election have seen rates any lower.  

Loan Originator Perspective

As we hold below 2.25 optimism for lower rates increases. I'm in wait and see mode.  We could be setting up for a test of 2.17.  -Jason Anker - Sr. Loan Officer 

The benchmark 10 year note has fallen today to its best level since about mid April around 2.22.  This level has been a source of resistance that will take some motivation to break.  Following the strategy of float the highs, lock the lows, i think it would be wise to consider locking in these gain.  There is another more solid floor just below at 2.22 so there isn't a huge amount to gain by floating.   -Victor Burek, Churchill Mortgage

Rates improved slightly today as bond markets digested some Fed rhetoric and marginally pertinent economic data.  It's a short week, and we're likely to benefit from some month end bond demand.  I don't look for a sizable rally, but could see pricing improve somewhat as the week rolls on.  Within 30 days of closing and laying awake at night, wondering about locking?  Pull the trigger and start sleeping.  Those who have more time (and who aren't insomniacs) may want to watchfully float for a few days.   -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.