November 14, 2017
Mortgage rates didn't move much today, despite moderate improvements in bond markets. Typically, stronger bond markets result in lower rates, but if anything, more lenders moved into slightly weaker territory. That has a lot to do with the fact that bonds were in weaker territory around the time most lenders put out the first rate sheets of the day. With bonds improving in the afternoon, several lenders have issued mid-day reprices, bringing their rate sheets more in line with the underlying market.
In a broader sense, if we're not seeing widespread participation in mid-day reprices (and we're not), it's because underlying markets have yet to definitively overcome the slow, steady trend toward higher rates over the past few months.
Tomorrow morning's Consumer Price Index brings the risk of more confirmation for that trend, but only if it comes in stronger than expected. Economists are currently expecting a "core" year-over-year inflation reading of 1.7%--the same as the past 6 months. Any improvement from there could be seen as the first sign of growing inflation pressures--something that would ensure the Fed is as restrictive as its wiling to be in terms of monetary policy. That means Fed rate hikes and decreased bond buying would stay on track. Both of those policy stances would keep upward pressure on rates.
Loan Originator Perspective
Bond markets posted minor gains today, as traders eyed Wednesday's looming inflation data. We're essentially range-bound at the moment, and it doesn't feel like we're going to move too far (one way or the other) for a while. Those over 30 days from closing may want to carefully float, those within 30 days may want to take risk off the table and lock. -Ted Rood, Senior Originator
Today's Most Prevalent Rates
- 30YR FIXED - 4.0%
- FHA/VA - 3.75%
- 15 YEAR FIXED - 3.375%
- 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've 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.