It was a good run for mortgage rates, relative to the rest of 2018, but after spending 3 days in a row with mild-to-moderate improvements, rates quickly snapped back to multi-year highs today.  The general trend in 2018 as well as the general level of volatility deserve some of the credit.  The bonds that underlie mortgage rate pricing actually aren't quite back to last week's levels.  Lenders are simply quicker to adjust things for the worse when the trend has been unfriendly and when the prices of those underlying bonds have been jumping around as much as they have.

The other part of the credit goes to the market's interpretation of comments made by new Federal Reserve Chair Jerome Powell, who gave his first semi-annual congressional testimony today.  Powell didn't do or say anything wrong.  In fact, he did a great job conveying what recent speeches and policy documents suggest we already know about the Fed's policy stance. 

The only issue was one of his comments was open to the interpretation of pointing toward an additional rate hike in 2018.  Many market participants were already planning on that rate hike, but the prevailing view was for a slightly slower pace.  After the Powell comment (he simply said he thinks the economic outlook is stronger now than he did in December), some of the investors in the "prevailing view" camp shifted their rate hike outlook to the "additional hike in 2018" camp.  That was enough for mid-day bond market weakness and widespread lender adjustments to higher rates in the middle of the day.

Loan Originator Perspective

Bonds sold off sharply today, as Fed Chairman Powell testified before Congress.  While his rhetoric wasn't surprising, it reinforced markets' views that the Fed will continue reducing its balance sheet.  Nothing's changed here, the trend is to higher rates, and that means lock early!-Ted Rood, Senior Originator

My clients and i continue to favor locking as early as possible.   Each time bonds try to rally, it is met with selling pressures.  Until this trend is over, locking is the wise move. -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.