After quite a bit of volatility and a move up to 7-year highs last week, mortgage rates have managed to avoid any semblance of drama so far this week.  In fact, each of the past 2 days has seen the average lender keep 30yr fixed rates perfectly in-line with Friday's latest levels.  The worst that could be said of these rates is that they're very close to last week's highs. 

The second worst thing that could be said of these rates is that they're the latest in a series of gradual moves higher over the past few years.  The general expectation is that rates can continue to move higher as long as the economy continues to tolerate higher borrowing costs.  Mortgage lenders know that we are now in a rising rate environment.  That means they're less likely to offer huge improvements on rate sheets unless we see a sustained and substantial improvement in bond market levels.  Until that kind of improvement shows up (we'll definitely be talking about it when it happens), it makes sense to remain defensive in terms of locking vs floating.

Loan Originator Perspective

Bonds have had a sedate week so far, which may continue given Friday's early close.  I'm not looking for much movement in either direction, the trend is not our friend (yet).  I'm locking loans within 30 days of closing. - 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.