August 17, 2017
Mortgage rates fell yesterday in response to a tweet about Trump disbanding his councils of CEOs. Twitter was in play again today. This time around it was Gary Cohn, Trump's economic advisor. Rather, it was rumors of Cohn's departure that sent financial markets into a tail-spin. Terror attacks in Spain may have played a supporting role. The net effect was heavy losses for stocks and solid gains for bonds. When bonds improve, rates fall.
Mortgage lenders continue to be slow to pass along the gains in bond markets in general, but they're certainly passing them along. Multiple lenders issued positive reprices in the afternoon as bond markets rallied. Conventional 30yr fixed rates are increasingly being quoted at 3.875% as opposed to 4.0% on top tier scenarios. On average, rates are the lowest since November 2017--something we've been able to say for the 2nd straight day, and several times over the past few weeks.
Loan Originator Perspective
Another day of tepid action in bond markets, as Fed members cited sub-par growth and inflation concerns. My pricing improved marginally, but stayed within recent ranges. Sitting at these levels certainly isn't bad for borrowers and lenders, but can lull both into false senses of security. If you're happy with your pricing, and within 30 days of closing, consider locking and sleeping soundly than tossing over a minimal potential pricing improvement. -Ted Rood, Senior Originator
Geopolitical events continue to push yields to the bottom of the range keeping rates at or near post election lows. With markets thinly traded, as usual this time of year, we can see more volatility in markets. Still advising locking for clients inside of 30 days to close but the leash is lengthening on more risk averse clients outside of 30. -Geoff Allison, Blue Skye Lending NMLS #200002
It appears the attack in Spain is pushed bond yields below the resistance at 2.21. I am not convinced that this is the move that takes us to even lower yields. I continue to favor locking. As of about 2pm, a few lenders have repriced for the better, so wait until later today and look to get locked in. -Victor Burek, Churchill Mortgage
Today's Most Prevalent Rates
- 30YR FIXED - 3.875-4.00%
- FHA/VA - 3.5-3.75%
- 15 YEAR FIXED - 3.25%
- 5 YEAR ARMS - 2.75 - 3.25% depending on the lender
Ongoing Lock/Float Considerations
- Investors were relatively convinced that the decades-long trend toward lower rates had been permanently reversed after Trump became president, but such a conclusion would require YEARS to truly confirm
- Instead of continuing higher in 2017, rates instead formed a narrow, sideways range, and held inside until April. Investor perceptions are shifting such that fiscal reforms and other policy developments will need to live up to expectations in order to push rates higher. Geopolitical risks would also need to avoid flaring up (more than they already have)
- For the first time since the election, we're in a rate environment where you wouldn't be crazy not to lock at every little opportunity/improvement. Until/unless it's broken, the highest rates of early-2017 mark the ceiling, and we're now waiting to see how much lower we can go from here.
- 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.