Mortgage rates moved slightly higher today, and are now effectively at the highest levels in month.  That sounds a bit more dire than it is, though, because there hasn't been much movement in the bigger picture--especially over the past few days.  In fact, there's quite a good chance that you'd receive the same quote today as you would have late last week.  For most borrowers, that's in the mid 3.5% neighborhood when it comes to conventional, 30yr fixed loans.  

Flat financial markets (which are behind the relatively flat rates) speak to the risk of bigger movement in the coming days.  Specifically, market participants want to see what the Fed has to say in its policy announcement tomorrow afternoon.  A rate hike is not expected, but the Fed could still plant clues as to their intentions for the next meeting.

Loan Originator Perspective

Mortgage Rates seem to be in a holding pattern right now perhaps waiting for a cue from the Fed Meeting which ends tomorrow with a 2PM rate decision from the FOMC.  While no rate hikes are anticipated we'll be looking for a change in language which might hint at future movements.  I would be locking up the rate if I were closing in the next 30 days.  No harm in taking advantage of what are still very very low interest rates historically.  If you are closing further out, assess your tolerance for risk to make your lock decision.  -Hugh Page, Mortgage Banker, SeacoastBank

We’ve been in a pretty boring holding pattern for 11 days now in anticipation of tomorrows Fed rate decision.  While they are not expected to hike the market will pay close attention to any signal for the direction and speed of future decisions. Fed days are wild cards in my book, the market can decide to buy or sell based on a single word.  Floaters should be cautioned. -Jason B. Anker, Vice President- Loan Officer at Salem Five

Interest rates have been consolidating at the current levels and will breakout in the near term. Current mortgage rates are very attractive, locking in and preventing any pain may be the smarter move before tomorrow's FED announcement. I personally don't buy into the current move higher and would like to see the trade unravel. Shorter term loans are locked. -Gus Floropoulos, VP, The Federal Savings Bank

Another quiet day ahead of tomorrow's Fed announcement.  My pricing was virtually identical to yesterday's, and that's not a bad thing at all.  I'd be shocked if Fed Announcement drastically impacts rate markets tomorrow, but that possibility certainly exists.  Floating borrowers could certainly do worse than locking now;  floating borrowers who continue to float need to realize that when this range breaks (if it breaks to the upside) pricing could worsen a lot, quickly.  -Ted Rood, Senior Originator

Today's Best-Execution Rates
  • 30YR FIXED - 3.5%
  • FHA/VA - 3.25%
  • 15 YEAR FIXED - 2.75%
  • 5 YEAR ARMS -  2.75 - 3.25% depending on the lender

Ongoing Lock/Float Considerations

  • In the biggest of pictures, "global growth concerns" remain the driving force behind the long-term trend toward lower rates
  • Amid that trend, periodic corrections toward higher rates can and will happen.  These can happen for no apparent reason, or they can be brought on by changes in expectations surrounding central bank policy at home and abroad, as well as geopolitical and systemic risks

  • Time horizon and risk tolerance are 2 variables to consider when it comes to locking.  If you have plenty of time and don't mind losing some ground, set a limit as to how much higher rates could go before you'd lock to avoid further losses, and then float in the hopes of never seeing that limit.
  • In the shorter-term, it's always good to look for lock opportunities after rates have been moving lower or sideways repeatedly, especially if they've since begun to move back up in any sort of consistent way. 
  • 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).