June 22, 2018
Mortgage rates moved slightly higher today. Yet again, underlying bond markets suggested another fate. In other words, if mortgage rates were perfectly tied to underlying bond markets, they would have remained unchanged today.
So why didn't they? The answer is as simple as the timing of lender rate sheets. Bond markets were in slightly weaker territory earlier this morning. This resulted in lenders offering slightly higher rates. As bonds improved throughout the day, the gains weren't quite enough for those lenders to "reprice" to lower rates. There's a certain bar to clear in terms of market movement before reprices make sense and we didn't clear it today.
Loan Originator Perspective
Bonds seem rudderless with no clear direction. Continue to Lock at Origination. -Al Hensling
Not so sure there is any benefit to floating right now. I typically do not favor locking on a Friday, but i really don't see any reason for rates to improve unless the trade wars pick up...which is possible. Most clients are favoring to lock once within 30 days. - Victor Burek, Churchilll Mortgage
Bonds stayed within a tight range today, amid more Trump Twitter tariff news. Rates are as long as they've been since April (with the exception of a couple days of "Italy's going to leave the EU" panic), so I'm still locking early. Happy Friday! -Ted Rood, Senior Originator
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.