Mortgage rates remained unchanged today, on average.  This keeps them in line with their highest levels in more than a month, though admittedly, there hasn't been much upward movement since the sharpest leg of the spike ended last Wednesday.  Conventional 30yr fixed rates in the "high 3's" remain available for top tier scenarios, but 4.0% is slightly more prevalent now.

While there were several economic reports and seemingly important news stories today (both tend to have an effect on rates), bond markets marched to their own beat.  Traders were generally getting in position for tomorrow's Fed Announcement.  Two weeks ago, the order of the day had been to push rates lower heading into Hurricane Irma weekend.  There's been a correction in play since then.  From the long-term lows in early September, traders judged a neutral, pre-Fed rate range to be right around current levels.

All of the above leaves us in a position for more meaningful movement tomorrow.  The direction of the movement will be up to the Fed, or rather, to the market's reaction to the Fed.  We know a rate hike is highly unlikely and that the start of the balance sheet reduction plan is almost a given.  With the nuts and bolts already decided, the focus will be on the Fed's forecasts and the press conference with Fed Chair Yellen.  The festivities start at 2pm, meaning that rate volatility potential is highest in the afternoon and could continue 

The best candidate for the "next big thing" will be the Fed Announcement coming up on Wednesday.  After moving higher over the past week and a half, rates are ready to digest the Fed's message from a more neutral position.  Even so, it still makes more sense to stay on guard against upward pressure until and unless we see renewed momentum toward lower rates.

Loan Originator Perspective

Rates trudged higher yet again today, as tomorrow's Fed announcement loomed.  Bonds seldom rally right before Fed meetings, so today's movement isn't surprising.  It's highly unlikely the Fed will raise its overnight rate tomorrow, but probable the Fed announcement (or Chairwoman Yellen's press conference) will address their plans to shrink their bond portfolios.  Faster shrinking = higher rates.  Float with caution, or better yet, not at all.  -Ted Rood, Senior Originator

My clients and i continue to agree that locking before the FED announcement tomorrow is the way to go.  I do feel most of the pain is already baked in and we have a reasonable chance of seeing some improvements after, but it just isn't worth the risk.  -Victor Burek, Churchill Mortgage

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.