Mortgage rates moved lower today, setting yet another new low for the month of July.  For the past 2 weeks, rates have been pushing back against a fairly abrupt spike that took place heading into the month.  Concerns over the European Central Bank's (ECB's) bond buying plans sparked the move higher, but those concerns were officially put to rest as of yesterday.  

In simpler terms, extra demand for bonds pushes bond prices higher and rates lower.  The ECB buys LOTS of bonds.  This puts downward pressure on rates around the world (more so in Europe than in the US, but we still get some indirect benefit).  There was some concern at the end of June that the ECB was getting closer to announcing it would buy fewer bonds (thus the rate spike heading into July).  While that day will likely come eventually, yesterday's announcement assures markets that it hasn't been discussed yet.

Today was relatively quiet for financial markets, with no significant economic data or events.  Next week brings a Fed announcement, but it isn't expected to contain any bombshells.  

Loan Originator Perspectives

Bonds posted decent gains today in the absence of any economic data, and pricing is now July's best.  Granted, this rally hasn't moved rates dramatically, but at least the trend may now be our friend.  Next week may bring some month-end bond demand; I'm still inclined to float short term for new loans, if borrowers have some risk tolerance.  Those closing within 15 days could sure do worse than locking here. -Ted Rood, Senior Originator

Bonds are at about their best level in about a month and rate sheets do reflect that today.   I do not like locking loans on a Friday, but with bonds at their best levels, i would advise those closing within 15 days to go ahead and lock up.   I feel loans closing in more than 2 weeks can gamble a little and at least float over the weekend.  As always, if happy with current terms, go ahead and lock and remove all risk. -Victor Burek, Churchill Mortgage

Today's Most Prevalent Rates

  • 30YR FIXED - 4.00%
  • FHA/VA - 3.75% 
  • 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.