Mortgage rates moved modestly lower today, despite an absence of improvement in underlying bond markets.  Rates typically rise in this scenario, but this pattern has been more and more common recently.  It's nothing too scandalous--or even terribly interesting.  Lenders are simply less eager to follow every little juke and head-fake in bond markets when things have been so flat in the bigger picture.  The summertime phenomenon only adds to the apathy.  

The net effect is that lenders often find themselves with the need to adjust prices based on bond market movement in the previous business day.  In the current case, that means lenders are getting caught up with Friday afternoon's bond market improvement, thus allowing for lower rates on a day where bonds are technically weaker.

The coming days bring increasingly important economic reports.  These have the power to create more market movement than we saw at the end of last week and thus, a bigger change in mortgage rates, for better or worse.  For now, things have been holding exceptionally steady with an average top tier 30yr fixed rate of 4.0%.

Loan Originator Perspectives

Bond markets apparently forgot Monday was a business day, and slumbered along, essentially unchanged from Friday's close.  It's unlikely we'll see any significant moves until Wednesday-Friday, as the July NFP Job Situation report takes shape.  The biggest current incentive to float is obtaining better pricing based on 15/30 day locks, compared with 30/45 day's.  Not sure that's enough to justify the risk, but at least it's something.  If floating, make sure your lender is monitoring MBS movement.  -Ted Rood, Senior Originator

Today's Most Prevalent Rates

  • 30YR FIXED - 4.00%
  • 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.