Mortgage rates held mostly steady today, as some lenders were just barely higher and others slightly lower than yesterday's latest levels.  With that, the damage seen on Wednesday is still very much intact, meaning that almost any scenario is now being quoted an eighth of a point higher in rate on the average conventional 30yr fixed loan compared to the beginning of the week.

In terms of the outlook, two straight days of indecision in bond markets makes for a cloudy magic 8-ball.  We certainly know that Wednesday was an important day with fairly serious negative implications for the near term rate outlook.  It forced markets to reevaluate the likelihood of a June/July Fed rate hike.  What we don't know is whether or not that reevaluation is complete.  History suggests far bigger moves are in store, but it could take weeks for those moves to start taking shape.  Between now and then, the incentive to float one's rate is limited.

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).