Mortgage rates began the day in decent shape relative to last week.  The average lender's rate/fee combo was at least as low as it had been on Friday.  As the day progressed, however, underlying bond markets continued to weaken.  For many lenders, it was enough to make mid-day changes to rate sheets.  Affected lenders ended up slightly worse off compared to last Friday. 

Lenders who didn't reprice today are starting the day out at a disadvantage tomorrow.  In other words, if bonds don't change between now and tomorrow morning, those lenders would have to move rates a tad higher.  All that having been said, tomorrow is a half day for financial markets due to Independence Day on Wednesday (markets will be fully closed on Wed).  Lenders tend to be more conservative with rate sheets surrounding holiday market closures.  Bottom line: the potential for positive change is limited tomorrow.

Loan Originator Perspective

Bond markets regressed this PM after opening with small gains.  While we're still closer to recent lows than highs, it looks like our downward rate trend is on hold.  All but the most aggressive borrowers will likely want to lock early here. -Ted Rood, Senior Originator

Today's Most Prevalent Rates

• 30YR FIXED - 4.625-4.75
• FHA/VA - 4.25-4.5%
• 15 YEAR FIXED - 4.125%
  
• 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.