June 20, 2018
Mortgage rates moved modestly higher today after holding in roughly the same territory for the past 3 days. This brings them back in line with last Thursday's levels. In general, trade tensions helped the bond market earlier this week (stronger bonds = lower rates), but the bonds that underlie mortgages didn't benefit nearly as much as US Treasuries.
Additionally, mortgage lenders have had to play it safer than normal amid a rising rate environment and recently higher volatility. The net effect of these factors is that mortgage rates have often not been able to participate too much during the good days, but have still had to take their lumps on the bad days.
The caveat to all of the above is that the day-to-day moves have been very small in the grand scheme of things. For instance, today's move "back in line with last Thursday's levels" could even be undetectable for some loan quotes. In most cases, it would only affect upfront costs and not the mortgage note rate.
Loan Originator Perspective
Bond markets stalled today, giving back a portion of recent gains. Looks like we've hit best levels for now, I'm locking new loans ASAP. -Ted Rood
Today's Most Prevalent Rates
- 30YR FIXED - 4.625
- FHA/VA - 4.375%
- 15 YEAR FIXED - 4.00%
- 5 YEAR ARMS - 3.75-4.25% depending on the lender
Ongoing Lock/Float Considerations
- Rates have 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.