July 5, 2018
Mortgage rates were sideways to slightly higher today as financial markets returned for the final 2 days of the holiday-shortened week. Trade war anxiety is front and center for both stocks and bonds (which dictate rates).
Fear of negative economic fallout surrounding trade policies is keeping stocks in a holding pattern just off their recent highs. Tomorrow, investors will also have to contend with an important scheduled event in the form of the big jobs report at 8:30am ET. While the jobs data is always capable of causing volatility for rates, it will be balanced against trade-related developments due to the scheduled implementation of new tariffs on China at midnight.
For instance, if trade-related fears are causing markets to panic, that panic could easily help bonds more than a strong jobs number would hurt. That's just one potential combination, however. If the market reaction to trade-related developments is in line with the reaction to the jobs report, that could be the thing that begins pushing stocks and rates out of their recently narrow ranges, for better or worse.
Loan Originator Perspective
Bonds traded in a narrow range today, no surprise given the shortened trading week. There was no reaction to last month's Fed Minutes, which were released this PM. Tomorrow's NFP jobs' report is the wild card here. I don't expect a huge impact, an neutral on lock/float today. -Ted Rood, Senior Originator
Today's Most Prevalent Rates
- 30YR FIXED - 4.625-4.75
- FHA/VA - 4.25-4.5%
- 15 YEAR FIXED - 4.125%
- 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.