April 27, 2018
Mortgage rates moved lower again today, bringing them back in line with Monday's levels for the average lender. That said, rate sheets have been very stratified between lenders during the recent spat of volatility. In other words, even if 2 lenders were similarly-priced on Monday, they might not be today. Compared to Wednesday (highest rates this week), today's rates are nearly an eighth of percent lower.
The improvement in bond markets (which underlie rates) was somewhat serendipitous in the sense that there was no overt motivation in terms of economic data or news headlines. That's not to say there were no big economic reports (indeed, the first reading of Q1 GDP was released this morning)--just that they didn't elicit a big response in bonds.
Loan Originator Perspective
Bonds caught a second day of gains, Friday, and we *may* have seen the worst of our recent selloff Wednesday. Both treasuries and MBS have rallied considerably since then, but I'm not sure rate sheets reflect the full gains. Borrowers with some risk tolerance may want to wait for Monday's pricing, if doing so doesn't cause insomnia. -Ted Rood, Senior Originator
Today's Most Prevalent Rates
- 30YR FIXED - 4.625%-4.75%
- FHA/VA - 4.25%-4.5%
- 15 YEAR FIXED - 4.0%
- 5 YEAR ARMS - 3.625%-3.875% 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 been moving higher in a serious way due to headwinds that cannot be quickly defeated. These include the Fed's increasingly restrictive monetary policy outlook, the increased amount of Treasury issuance to pay for the tax bill (higher bond issuance = higher rates), and the possibility that fiscal stimulus results in higher growth/inflation.
- While we may see periodic corrections to the broader trend toward higher rates, it's safer to assume that broader trend can and will continue. Until that changes, it makes much more sense to remain heavily-biased toward locking as opposed to floating.
- 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.