April 11, 2018
Mortgage rates technically hit the lowest levels in 2 months today. The catch is that they were already pretty close and that today's improvement wasn't necessarily that big. In fact, most borrowers will see the same interest rate in today's quotes with the only difference being a slight adjustment in upfront costs/credits.
We'd been waiting somewhat eagerly for today's Consumer Price Index (CPI)--a key inflation report with a consistent track record (at least in the past year) of causing movement for rates. When CPI is stronger than expected, rates tend to rise. When it's weaker, rates fall--all other things being equal. Today's CPI came out largely in line with expectations. The important "Core" number showed annual inflation right in line with the 2.1% forecast.
In other words, our big potential market mover ended up being mostly equivocal in its recommendation for movement! Bonds (which dictate rates) also took cues from geopolitical risks stemming from Trump's "missile" tweet regarding Syria/Russia. Geopolitical flare-ups tend to push rates lower.
Loan Originator Perspective
Despite the 10yr holding below resistance at 2.80, my clients and i continue to favor locking. Only loans i would consider floating would be ones that can lock on a shorter time frame tomorrow. Most of today's gains were based on headlines which can quickly unwind. -Victor Burek, Churchill Mortgage
Bond markets shrugged off Fed minutes, inflation data, and a treasury auction today, posting slight gains. Treasury yields dropped under 2.8%, a significant resistance point, we'll see if they remain there. I'm still locking early, until DC Drama or geopolitical risk grow considerably.-Ted Rood, Senior Originator
Today's Most Prevalent Rates
- 30YR FIXED - 4.5%
- FHA/VA - 4.25%
- 15 YEAR FIXED - 3.875%
- 5 YEAR ARMS - 3.5-3.75% 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 moved higher in a more threatening way heading into the beginning of 2018
- The scariest part of the move higher looks like it ended as of early February, and rates have been generally sideways since then
- Even so, the potential remains for more weakness (i.e. higher rates). It makes more sense to remain defensive (i.e. more inclined to lock) until we've seen a more convincing shift lower.
- 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.