July 3, 2018
Mortgage rates ended the day roughly in line with yesterday's on average. That said, there's a wider-than-normal gap between lenders depending on several variables. The underlying issue is the timing of bond market volatility over the past 2 days. Let's break it down!
Yesterday started strong. Lenders who released rate sheets early enough in the day were in better shape compared to last Friday. Bonds soon began to weaken (which implies higher rates). A decent handful of lenders adjusted rates higher in the afternoon, but many kept rates unchanged. Because of this, I mentioned they'd be starting today at a disadvantage, and indeed they did.
Lenders who did NOT reprice yesterday were faced with weaker bond markets this morning as well as the need to get caught up with yesterday's move. As such their rate sheets were worse. Lenders who DID reprice yesterday were able to begin the day in roughly the same shape as yesterday.
The final curveball arrived in the form of a nice bond market improvement throughout the course of the day. Several lenders made mid-day rate sheet adjustments for the BETTER. Depending on how those lenders had played the volatility of the previous 24 hours, this left some of them unchanged and some slightly better. The lenders who didn't change rates today ended up dragging down the average, but the bottom line is that "better/worse/unchanged" is heavily dependent on the individual lender's 48-hour strategy. In the bigger picture, we're still in the same territory of the past 5 days.
Loan Originator Perspective
Never a fan of locking ahead of a holiday day off. Bonds are having a green day, so i think it would be worth the risk to float until Thursday when the market reopens. I believe lenders tend to be conservative with pricing ahead of a holiday off. -Victor Burek, Churchill Mortgage
Bond markets posted some gains today prior to closing early for Independence Day. I'd love to see this move continue on Thursday, but sure could do worse than locking now. Happy 4th of July! -Ted Rood, Senior Originator
Continue to lock at origination. No fireworks today! -Al Hensling
Today's Most Prevalent Rates
- 30YR FIXED - 4.625-4.75
- FHA/VA - 4.25-4.5%
- 15 YEAR FIXED - 4.125%
- 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.