Mortgage rates rose today, resuming an upward trend that began last week after political turmoil in Italy began to die down.  More simply put, rates had been rising in mid May.  Italy's political turmoil caused enough concern about the fate of the Eurozone that investors moved money into bonds, thus helping rates move lower.  As risks subsided in Europe, rates have returned to similar levels as those seen in the first half of May.

Any talk of rejoining an upward trend that began last week is a bit misleading.  In fairness, the broader trend has been toward higher rates since last September.  Last week's move was one of the many volatility little episodes inside the broader trend.

One of the driving forces behind the broader trend is the current state of central bank policy (The Fed, and The European Central Bank, for example).  With that in mind, investors are already gearing up for next week's announcements from both central banks.  Depending on what's said, we could either be looking at another move to the highest rates in years or another nice little break from the unpleasant trend.

Loan Originator Perspective

Following the unexpected rally following news from Italy over the weekend, bonds continue to give back the gains.  The trend is still not our friend, so locking in is the way to go.   Too much to lose and not a lot to gain by floating. -Victor Burek, Churchill Mortgage

Rates regressed today, as treasury yields hit 2 week highs.  Many lenders worsened their pricing by mid-PM.  I've been locking early, today's a great example why. - Ted Rood, Senior Originator

Choppy waters continue to favor locking at origination. -Al Hensling

Today's Most Prevalent Rates

  • 30YR FIXED - 4.625-4.75%
  • FHA/VA - 4.375%
  • 15 YEAR FIXED - 4.00%
  • 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.