November 3, 2017
Mortgage rates were mostly sideways today although a few lenders offered token improvements. When we talk about small improvements in "mortgage rates," we're often dealing with the "upfront cost" side of the equation that dictates the overall cost of financing. The other, more obvious side would be the interest rate itself. Upfront costs offer more of a fine-tuning adjustment. Many borrowers wouldn't even notice today's improvements. Others will see than as a couple hundred dollars.
Today brought the big jobs report--traditionally one of the most important economic reports as far as interest rates are concerned. At present, the jobs data is packing less of a punch, simply because strong, stable labor markets are fairly well established in the economic data. It's not a surprise for investors, so there's less of a reaction in stocks and bonds (which drive rates).
For now, rates are as low as they've been in the past 2 weeks, but there's not an exceptionally wide margin between the highs and lows during that time. The average lender continues quoting 4.0% on top tier 30yr fixed scenarios, although more aggressive lenders are slightly lower.
Loan Originator Perspective
October's NFP jobs report was essentially a non-factor today, despite slightly missing expectations. My pricing today is virtually on par with yesterday's. As of mid-day, MBS were slightly higher, but only not enough to trigger lender reprices. It'll be interesting to see if President Trump's Asian trip sparks any Korean Drama in the coming days, think it'll take something of that magnitude to sway bonds considerably. Float/lock is 50/50 here, which usually means locking prevails. -Ted Rood, Senior Originator
Bonds got a nice supportive bounce at 2.36. With a potential ceiling in place and today being Friday, i would roll the dice and float over the weekend. As always, if you are happy with current pricing go ahead and lock and only float if you can afford to be wrong. -Victor Burek, Churchill Mortgage
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.