Mortgage rates were relatively steady again, marking the third straight business day with almost no rate movement following last week's quick spike higher.  That spike was all about financial markets quickly coming to terms with a higher probability of a Fed rate hike.  Given that there hasn't been any movement since then, we can increasingly assume that markets took care of this business by Wednesday afternoon. While it's reassuring that we haven't seen any additional move higher in rates, neither have we seen any meaningful move lower.  That leaves the average conventional 30yr fixed rate quote at 3.75%, but there are still quite a few lenders quoting 3.625%.  

Loan Originator Perspective

"Since rate sheets took a beating following the FOMC minutes on Wednesday, bonds have managed to continue to move higher.  The rate sheets I have seen are still lagging somewhat as lenders tend to be slow to pass along improvements.   As long as you can tolerate and understand the risk, I would float over night to see if bonds can continue to move higher in price, lower in yield." -Victor Burek, Churchill Mortgage

Today's Best-Execution Rates

  • 30YR FIXED - 3.75%
  • FHA/VA - 3.25%-3.5%
  • 15 YEAR FIXED - 3.00%
  • 5 YEAR ARMS -  2.75 - 3.25% depending on the lender

Ongoing Lock/Float Considerations

  • The Fed finally hiked on December 16th, causing fears of rising rates in 2016, but markets began the new year with rates moving surprisingly lower.  Major losses in stocks and oil prices were part of the same trend of investors moving away from risk.
  • After bottoming out fairly close to all-time lows in February, rates have seen only brief episodes of volatility in a low, narrow range.  

  • The Fed's most recent announcement at the end of April reinforced their cautious approach to rate hikes.  This helped rates improved through mid May
  • Now some investors are getting concerned that the Fed may be more prepared to hike rates than markets currently expect.  This could create volatility and pressure toward higher rates heading into the June Fed meeting, thus favoring locking vs floating.
  • As always, please keep in mind that the rates discussed generally refer to what we've termed 'best-execution' (that is, the most frequently quoted, conforming, conventional 30yr fixed rate for top tier borrowers, based not only on the outright price, but also 'bang-for-the-buck.'  Generally speaking, our best-execution rate tends to connote no origination or discount points--though this can vary--and tends to predict Freddie Mac's weekly survey with high accuracy.  It's safe to assume that our best-ex rate is the more timely and accurate of the two due to Freddie's once-a-week polling method).