Mortgage rates spiked to 7-year highs yesterday.  While today's move was nowhere near the same size, it was in the same unfriendly direction.  That makes it the worst day for mortgage rates since the middle of 2011.  Whether "the middle" refers to May or July depends upon whom you ask.  In terms of individual days, a few were slightly higher in July on a day or two (depends on the lender). 

But in terms of weekly rate surveys, we'll need to go back to May 2011, to see Freddie Mac report something higher than 4.58%--the matching highs from 3 weeks ago and August 2013--at least until tomorrow.  Even with Freddie's typical margin of error, it's highly likely that 4.58% is a line that will be crossed in tomorrow morning's data.

Meanwhile, back in the real world, most prospective mortgage borrowers would be really excited to see anything under 4.625% on conventional 30yr fixed loans for ideal scenarios.  Regardless of outright levels (which lenders don't necessarily agree on), the change over the past 2 days is much easier to pin down.  The average lender is almost exactly .125% higher in rate.

Loan Originator Perspective

Bonds continued their downward slide today, as rates rose yet again.  Floating borrowers need to realize that last week's rates most likely won't be back soon.  I'll continue locking at application. -Ted Rood, Senior Originator

Today's Most Prevalent Rates

  • 30YR FIXED - 4.75-4.875%
  • FHA/VA - 4.5%
  • 15 YEAR FIXED - 4.25%
  • 5 YEAR ARMS -  3.75-4.25% depending on the lender

Ongoing Lock/Float Considerations

  • Rates have 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.