Mortgage rates held steady today, and were slightly lower in some cases.  That's not entirely logical at first glance because the bonds that dictate mortgage rates suggested the opposite.  Considering a 2-day time frame helps us reconcile this paradox.  Bonds had improved by the end of the day yesterday, albeit slightly.  Lenders, however, didn't account for that improvement by changing rates yesterday.  Instead, they made their adjustments with this morning's rate sheets.  Bonds were unchanged to slightly stronger this morning.  Today's weakness arrived after most lenders already had rate sheets out for the day.

Applying the same logic discussed above, we could reasonably expect tomorrow morning's rates to be slightly higher, unless bond markets happen to improve significantly overnight or early tomorrow morning.  Either way, there's potential for volatility following the Consumer Price Index report at 8:30am.  This is the most important data on inflation at the moment, and inflation is currently an important consideration for Fed policy (which, in turn, is one of the key considerations for rates!).

Risk-averse borrowers and originators see today as a good lock opportunity amidst the general move toward higher rates this week.

Loan Originator Perspective

Bond markets idled in place today, with minor losses by mid PM.  My pricing was virtually identical to yesterday's.  We're now squarely back in recent ranges, with treasury yields at 2.19.  Tomorrow we get Core CPI (inflation) data; it's likely to affect bond market's outlook.  Still too early to start floating deals within 30 days of closing, at least for most clients.  My crystal ball isn't showing where we go from here, at least today.  -Ted Rood, Senior Originator

Today's Most Prevalent Rates

  • 30YR FIXED - 3.875-4.0%
  • FHA/VA - 3.5% 
  • 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.