August 18, 2017
Mortgage rates moved lower again. Drama surrounding the Trump administration was also present. But this time around, the political theater wasn't responsible for the move lower in rates. In fact, it resulted in multiple lenders adjusting rate sheets higher in the middle of the day. Fortunately, rates fell enough in the morning that the net result was still positive. The average lender is at new lows for 2017 (lowest since just after the November 2016 election, in fact).
3.875% is now the most prevalently-quoted conventional 30yr fixed rate for top tier scenarios, although quite a few lenders remain at 4.00%.
Next week brings the normally-hotly-anticipated Jackson Hole symposium, but with monetary policy for both the Fed and the European Central Bank essentially an open book of late, market participants aren't expecting too much drama.
Loan Originator Perspective
Yet another day of limited movement in bond markets today, despite more rumors of administration discord/departures. I'm not locking most loans until 30 days before closing. This range will break, someday, but it doesn't look like that day is today. Happy Friday! -Ted Rood, Senior Originator
After starting the day in positive territory, bonds are starting to leak into the close. They apparently do not like the waters below the 2.21 level on the 10 year treasury note. Even though I am not a fan of locking on Friday, my clients are deciding to pull the trigger today. I just do not see much benefit right now in floating, locking is the way to go. -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.