Mortgage rates were steady to slightly higher again today, making it the 13th out of the past 16 business days without an improvement. The situation was more palatable earlier this morning and quite a few lenders were actually in better territory vs yesterday. As the day progressed, bond markets (which dictate mortgage rates) deteriorated, resulting in most lenders issuing negative reprices.
All of the above means that some lenders remained in better shape than others, but they assumption is that they would "catch up" to the higher rates with tomorrow morning's rate sheets (assuming bond markets didn't change overnight).
As is frequently the case, we're splitting hairs here, because that's what we have to do if we're following day-to-day mortgage rate movement. Most borrowers won't see a meaningful difference between today's quotes and yesterday's. Lenders continue operating near a conventional 30yr fixed rate of 4.125% on top tier scenarios, although it's worth noting that the general trend is toward higher rates at the moment.
To repeat yesterday's assessment of lock/float risks: we'd like to see a departure from the aforementioned trend before anything other than a conservative, lock-biased approach makes sense.
Loan Originator Perspective
A near dismal treasury auction today reinforced bonds' multi-week swoon. While the sell-off has been orderly, it still adds up, and pricing seemingly deteriorates daily. Several lenders repriced for the worse by mid PM. Different day but same story, locking at earliest opportunity seems a no-brainer at the moment. -Ted Rood, Senior Originator
Nothing has changed on mine or my clients outlook. Until this trend of higher rates comes to an end, I will continue to lock once within 30 days of closing. If you plan to float, you better hope for weaker economic data tomorrow and Friday. One item working for floaters will be the new supply of treasury debt ends tomorrow. Quite often rates rally once this supply is absorbed, but not so sure I would be banking on that today. -Victor Burek, Churchill Mortgage
Today's Best-Execution Rates
- 30YR FIXED - 4.125%
- FHA/VA - 3.75 - 4.0%
- 15 YEAR FIXED - 3.375%
- 5 YEAR ARMS - 2.75 - 3.25% depending on the lender
Ongoing Lock/Float Considerations
- Investors were relatively convinced that the decades-long trend toward lower rates had been permanently reversed after Trump became president, but such a conclusion would require YEARS to truly confirm
- Instead of continuing higher in 2017, rates instead formed a narrow, sideways range, and held inside until April. Investor perceptions are shifting such that fiscal reforms and other policy developments will need to live up to expectations in order to push rates higher. Geopolitical risks would also need to avoid flaring up (more than they already have)
- For the first time since the election, we're in a rate environment where you wouldn't be crazy not to lock at every little opportunity/improvement. Until/unless it's broken, the highest rates of early-2017 mark the ceiling, and we're now waiting to see how much lower we can go from here.
- 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.