Mortgage rates were unchanged today, on average, marking the second straight day with minimal change near the highest levels in more than 2 months.   For most lenders, that means conventional 30yr fixed rate quotes near 4.0% on top tier scenarios.  So far this week, day-to-day changes have been limited to the upfront closing cost side of the equation (as opposed to interest rates themselves).  While this can have a slight impact on the overall cost of financing, it doesn't change the "note rate" attached to a new mortgage.

Underlying financial markets have been fairly calm for the past 2 days despite successive all-time highs in stocks.  The economic data and events that motivate bond markets (which dictate mortgage rates) have been absent, but that's set to change heading into the 2nd half of the week. With the economic data comes an increase in potential volatility.  Rates have risen enough since early September that some market participants are hoping they'll find a ceiling soon, but we haven't seen enough evidence for that to abandon a defensive stance just yet. 

Locking continues to make more sense than floating until bond markets improve more meaningfully.  To quantify that, if 10yr yields are in the low 2.3's today, we wouldn't even begin to entertain a shift in the broader negative trend until 10yr yields hit the low-to-mid 2.2's.

Loan Originator Perspective

Bond markets were flat today, in the absence of any meaningful data.  I'm glad we're no longer losing ground, but that doesn't constitute a rally.  I may not lock all new loans immediately, but sure inclined to lock any within 30 days of closing.  -Ted Rood, Senior Originator

The trend continues to not be the friend of consumers hoping for lower rates.  Bond prices have been getting worse day after day.  At this point, until the trend changes, you must play defensive.   If within 30 days of closing, you should consider locking in.  Bonds have improved some since the open, so wait until later in the day to pull the trigger.  We have already had a couple lenders improve pricing from the first rate sheet of the morning. -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

  • 2017 has proven to be a relatively good year for mortgage rates despite widespread expectations for a stronger push higher after the presidential election in late 2016.  Most of the rate spike was done by the end of 2016 and we've generally moved sideways to lower since then

  •  The biggest question is whether or not this counter-intuitive trend has an expiration date.  Rates haven't been immune from brief corrections back toward higher levels, and each correction causes concern that the good times are over.

  • Despite those concerns, we've seen rates make new lows in April, June, and September.  Although rates have been rising since early September, they'd have to move even higher before we'd consider a change in the bigger picture theme.

  • All of the above having been said, past precedent suggests we're due for a much bigger dose of volatility some time soon.  
  • 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.