Financial markets in the US will be closed for President's Day on Monday. Thus, mortgage lenders will not be open, nor will they be accepting locks. Given that mortgage rates took the road less traveled in 2018 and actually moved lower, it's worth having a chat with your mortgage professional if you have a loan in process. 

Of course, many of you may not be reading this until after the lock window has passed for today, so let's take a look at next week's risks and opportunities.  The biggest risk is the same one that's been with us all year.  Simply put, rates have been trending higher in a steady but highly convicted fashion, quickly adding a half a percentage point or more to the average 30yr fixed rate quote.  As we've been saying all year, it doesn't make sense to bet against that trend until it shows clear signs of cooling, and today's modest improvement doesn't cut it.

The opportunity is the same one that's cropped up on several occasions in the past few months.  Rates have generally circled the wagons with 2 stable or stronger days in a row to end the week.  Every time that happens, there's a chance it will grow into a broader show of support.  The emphasis here is on "chance."  It hasn't been a chance worth taking, and the pain of locking too early only to see rates improve is more tolerable than the pain of anticipating a top in rates and being wrong.

Loan Originator Perspective

Bonds caught some moderate gains today, as tame inflation data helped ease investors' concerns (for the moment).  An up day here or there hardly constitutes a rally, or a change in the seemingly relentless march to higher rates.  I'm still locking early, will take a lot more than I've seen so far to change that mindset. -Ted Rood, Senior Originator

Take advantage of the improved pricing this morning and lock in.   I typically do not like locking ahead of a 3 day weekend, but not this weekend.  The trend is still not our friend. -Victor Burek, Churchill Mortgage

Today's Most Prevalent Rates

  • 30YR FIXED - 4.625%
  • FHA/VA - 4.375%
  • 15 YEAR FIXED - 3.875%
  • 5 YEAR ARMS -  3.5-3.75% 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 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.