December 5, 2017
Mortgage rates were more intuitive today with most lenders keeping things unchanged at first. This matched the movement in underlying bond markets, where today's trading levels in the morning (when most lenders put out the first rate sheet) were roughly in line with yesterday's.
As the day progressed, however, bonds began to improve steadily. This improvement was enough for many lenders to issue positive reprices in the afternoon (i.e. new, lower rates for the day). While every little bit helps, we're only talking about a token change in most cases. The average borrower will see the improvement in the form of slightly lower upfront costs, with no change in the actual note rate.
The average lender continues quoting conventional 30yr fixed rates at 4.0% for top tier scenarios. This hasn't changed fore more than 2 months.
Loan Originator Perspective
It was another flat day for rates Tuesday, despite some modest MBS gains as the day wore on. My pricing was virtually identical to Monday's. A few lenders repriced marginally better mid-PM. Treasury yields dropped to 2.35, continuing their small recent rally. I think floating overnight may be worth the risk, for borrowers with small risk tolerance. Still no established trend until we determine tax reform's fate. -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.