Mortgage rates improved by what could only be described as a token amount today.  In other words, we're not talking about any major changes.  In fact, mortgage rates themselves will be unchanged from Friday for almost any scenario.  As is so often the case, we can only measure the change in terms of "effective rates" (which take upfront costs into consideration).  In general, changes in mortgage rates are reserved for big market moves whereas upfront costs and effective rates allow for smaller changes in the overall cost of financing.

The bond markets that underlie mortgage rates were closed yesterday for the Veterans Day holiday.  In the meantime, the stock market lost ground rather abruptly.  At times, bonds (rates) will take cues from stocks--especially when the latter is making a big move lower.  As such, bonds began the week with a boost.  This is why I referred to mortgage rate gains rather cynically (because the actual market movement suggested a better showing today).

Bond markets and mortgage lenders could both be a bit apprehensive ahead of tomorrow's important inflation report, the Consumer Price Index.  If inflation comes in much stronger than expected, it should put noticeable upward pressure on rates.  Conversely, weaker inflation could help the recent trend of improvement continue unless the stock market is staging a huge comeback for an unrelated reason.

Loan Originator Perspective

Bonds posted marginal gains Tuesday, as stocks licked their wounds after yesterday's huge selloff.  I'd hoped investors would put some of their stock proceeds into bonds (leading to lower rates) but that didn't happen.  We're still essentially stuck in a holding pattern, so I'm locking early. -Ted Rood, Senior Originator

Current trends still suggest locking at submission to avoid disappointment. Volatility is running high and the slightest news can send markets higher. -Al Hensling

Clients are taking advantage of the improved pricing today and locking.  Risky to float overnight as we get inflation data in the morning.  For rates to hold ground or improve, we will need weaker than expected inflation data.  -Victor Burek, Churchill Mortgage

Today's Most Prevalent Rates

  • 30YR FIXED - 5.0%
  • FHA/VA - 4.5%-4.75%
  • 15 YEAR FIXED - 4.5%-4.625%
  • 5 YEAR ARMS -  4.375%-4.875% depending on the lender

Ongoing Lock/Float Considerations

  • Rates continue coping with several big-picture headwinds, including: the Fed's rate hike outlook (and general policy tightening), the increased amount of Treasury issuance to pay for the tax bill (higher bond issuance = higher rates), and the possibility that fiscal stimulus results in higher growth/inflation (which certainly seems to be the case so far in 2018).

  • While rates were able to recover and stay sideways in the summer months, September and October have seen a surge up to the highest levels in more than 7 years. 

  • Upward pressure can continue as long as economic growth and inflation continue running near long-term highs.  Stay defensive (i.e. generally more lock-biased).  It will take a big change in economic fundamentals or geopolitical risk for the big picture to change.  Such things tend to not happen as quickly as we'd like.
  • 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.