Mortgage rates didn't move much higher today for most lenders.  While that absence of additional weakness is "nice," the net effect is that rates remain in line with their worst levels since early April.  Technically, there was a day or two in early May that were slightly worse, but not enough to consider today's rates anything other than "3-month highs."

You'd be well within your rights to assume that the highest rates in 3 months must coincide with the all-important Employment Situation (aka "jobs report")--a consistent market-mover that is released on the first Friday of any given month.  You'd also be wrong.  All--or at least a vast majority--of recent market movement owes itself to general weakness in European bond markets.  

As a reminder, bonds dictate interest rates and Global bond markets are somewhat interconnected.  That means that US Treasury yields tend to follow European bond yields if the latter are moving aggressively enough, and that's certainly been the case over the past 2 weeks.  Fortunately, the bonds that underlie mortgage rates (MBS, or Mortgage-backed-securities) are yet another degree removed from the epicenter of the recent drama.  That's why mortgage rates were able to hold relatively steady today despite some additional weakness in Treasuries.  

Loan Originator Perspective

Our bond market continues to be driven by the European taper tantrum.  Until that eases, I do not see our bonds managing any meaningful rally.   I am open to floating over the weekend as I have never been a fan of locking on Friday.  But you should only float if you can afford to be wrong. -Victor Burek, Churchill Mortgage

Bonds slumbered through today's trading despite strong NFP jobs gains.  It's hard to say what might motivate an MBS rally at this point, but it's clearly not present.  The trend is not our friend; my pipeline is locked and I'll remain in "lock early" mode until further notice. -Ted Rood, Senior Originator

The trend has not been our friend of late and we had another solid jobs report today.  With continued indications of central banks apparent bias toward normalizing rate policy in the short term I would be locking everything at application.  Certainly in the longer term we could be setting up for a rally but defense is the name of the game for now in my opinion.  Protect what's in front of you now. -Hugh W. Page, Mortgage Banker, Seacoast Bank

Today's Most Prevalent Rates

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