December 14, 2017
Mortgage rates held on to yesterday's gains in most cases. Some lenders were even in slightly better shape today, but not enough to have an effect on anything beyond the upfront costs associated with any given rate quote. Rates themselves would be right in line with yesterday's.
That's not a bad thing considering yesterday afternoon brought effective rates near their lowest levels of the month. In this case, lower "effective rates" refer to lower upfront closing costs (or higher lender credits) for the prevailing top tier conventional 30yr fixed rates of 4.0%.
Bond markets (which underlie interest rate movement) continued to pay more attention to policy developments than the economic data that traditionally has an impact. In today's case, it was news that a few Republican senators may not vote for the tax bill unless certain changes are made. That resulted in stocks and bond yields both moving lower in the afternoon. Lower bond yields coincide with lower mortgage rates. As a result, many lenders were able to release positive rate sheet revisions this afternoon.
Loan Originator Perspective
Bond markets recouped opening losses by mid-day today, as details on tax reform continued to dominate news. It feels like reform (in some version) will pass, hopefully markets have had ample time to price in any inflationary effects. I still don't see a massive upside to floating here, feels like a bet on unlikely propositions (tax reform failure/massive international discord/sudden DC drama). I'm locking loans within 30 days of closing -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.