Mortgage rates continued lower today, despite an absence of improvement in underlying bond markets.  That's not too surprising considering the average lender didn't fully adjust yesterday's rates to reflect market improvements.  Unlike yesterday, today was essentially flat for bond markets as investors prepare for 2 days of information from and about the Fed.

Tomorrow brings the Fed's official policy announcement.  While Fed announcements certainly CAN have a lot of impact on rates, that isn't terribly likely to be the case tomorrow.  Investors are almost certain the Fed won't move rates at this meeting and instead opt to do so at the December meeting. 

Of greater importance (and of more interest to investors) is Trump's pick to replace Janet Yellen as the Chair of the Federal Reserve.  That announcement is expected on Thursday.  While markets are expecting Powell to get the nod, there's likely some more room for rates to improve once that rumor is confirmed (bonds, and thus "rates," favor Powell over the other frontrunner).

Loan Originator Perspective

I mentioned yesterday that pricing didn't yet reflect Fri/Monday's full gains, so floating overnight might be advised.  Low and behold, despite remarkably flat bond markets (and some upbeat economic data), my pricing today improved.  The $20 question is whether today's lack of movement is the end of our rally or a pause in it.  I'd say 60% end, 40% pause.  Floaters be advised.  -Ted Rood, Senior Originator

With the benchmark 10 year note unable to break below 2.36, i think i would take this opportunity to lock in the recent gains.   I have a few clients within 15 days that will definitely be locking today.  -Victor Burek, Churchill Mortgage

Today's Most Prevalent Rates

  • 30YR FIXED - 4.0%
  • FHA/VA - 3.75% 
  • 15 YEAR FIXED - 3.375%
  • 5 YEAR ARMS -  2.75 - 3.25% depending on the lender

Ongoing Lock/Float Considerations

  • 2017 had 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. 

  • While rates remain low in absolute terms, they've moved higher in a more threatening way heading into the 4th quarter, relative to the stability and improvement seen earlier in 2017

  • The default stance for now is that this trend toward higher rates has the potential to continue.  It will take more than a few great days here and there for that outlook to change.

  • For weeks, this bullet point had warned about recent stability inviting a bigger dose of volatility.  That volatility is now here.  As such, locking is generally the better choice until the volatility is clearly dying down.
  • 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.