January 16, 2018
Mortgage rates didn't move much today. Most lenders were just slightly lower/better this morning, but mid-day market weakness prompted several of them to reissue higher rates. In the bigger picture, however, the past several days represent a welcome stint of relative calm. The general trend had been toward higher rates beginning in mid-December.
Granted, that general trend could continue and the past few business days could merely be a pause. But the point is, whether it's a pause or the beginning of a reversal, either would begin the same way. The important development in underlying bond markets has been resilience at the weaker (read: higher rate) levels. Using 10yr Treasury yields as a benchmark for rate in general, we'd want 2.60% to continue to act as a ceiling.
The ingredient we're still missing is the move below an important floor. In the current case, 2.52% would be a good first step. A move to 2.42% would likely correspond with top tier 30yr fixed mortgage rates returning to 4.0% on average.
Loan Originator Perspectives
Bond markets idled today as stocks reached yet more record highs. I have to wonder what rates would/will do if/when stocks ever regress, but not banking on that happening soon. There's limited pertinent data the rest of the week, I doubt we'll see any huge pricing swings. A few lenders have repriced worse in the last 30 minutes, I'll continue locking early. -Ted Rood, Senior Originator
Going into the close, bonds are rallying off the highs of the day thanks to stocks moving lower. A few lenders did reprice for the worse. If your lender was one of the few to reprice worse, i would definitely float overnight. If not, then its a toss up. If you can tolerate the risk, i would roll the dice overnight and see if we can break through resistance at 2.52 on the 10 year tomorrow. -Victor Burek, Churchill Mortgage
Today's Most Prevalent Rates
- 30YR FIXED - 4.125%
- FHA/VA - 3.75%
- 15 YEAR FIXED - 3.375%-3.5%
- 5 YEAR ARMS - 2.75 - 3.25% 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 moved higher in a more threatening way heading into the 4th quarter, relative to the stability and improvement seen earlier in 2017
- The default stance for now is that this trend toward higher rates has the potential to continue. It will take more than a few great days here and there for that outlook to change.
- For weeks, this bullet point had warned about recent stability inviting a bigger dose of volatility. That volatility is now here. As such, locking is generally the better choice until the volatility is clearly dying down.
- 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.