Mortgage rates have been exceptionally sideways for nearly 2 weeks now--this after hitting the highest levels in more than 4 years on April 25th.  As always, the run up to long-term highs happened in concert with weakness in the broader bond market.  Rates are based primarily on the prices of mortgage-backed securities (MBS).  In turn, MBS movement is heavily dependent on movement in the broader bond market (where bonds like US Treasuries are top dog, domestically).  

All that to say: we're not really witnessing a mortgage rate phenomenon, but rather a bond market phenomenon.  Both Treasuries and MBS are trying to decide if they will try to stage a more meaningful recovery or if they will push up to even higher levels than those seen in late April.  Some of this week's data and events could play a role in that decision making process, but we'll be waiting until Wednesday or Thursday to know for sure.  Even then, if the data is inconclusive, we could STILL be waiting for a bigger move, and without any firm indication as to what will ultimately be the motivating factor.

Loan Originator Perspective

Clients are favoring locking in at current levels.  The 10 year note doesn't look to want to break through resistance at 2.95%.   Unless we can break through that level, i don't see any need to float. -Victor Burek, Churchill Mortgage

Bond markets spent Monday idling near unchanged, and appear quite content where they're at.  My pricing was virtually identical to Friday's.  I'm leaning towards floating applications over 30 days from closing, but will still locking at 30 days for most clients.  -Ted Rood, Senior Originator

Lock at origination for files closing in the next 30 days under current environment. -Al Hensling

Today's Most Prevalent Rates

  • 30YR FIXED - 4.625%-4.75%
  • FHA/VA - 4.25%-4.5%
  • 15 YEAR FIXED - 4.0%
  • 5 YEAR ARMS -  3.625%-3.875% 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 been moving higher in a serious way due to headwinds that cannot be quickly defeated.  These include the Fed's increasingly restrictive monetary policy outlook, the increased amount of Treasury issuance to pay for the tax bill (higher bond issuance = higher rates), and the possibility that fiscal stimulus results in higher growth/inflation.

  • While we may see periodic corrections to the broader trend toward higher rates, it's safer to assume that broader trend can and will continue.  Until that changes, it makes much more sense to remain heavily-biased toward locking as opposed to floating.
  • 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.