March 23, 2018
Mortgage rates were just barely higher in many cases today, although underlying bond markets recovered enough ground by the afternoon to suggest Monday's rates will recoup those losses. The only catch is that other factors can have an effect on bonds between now and then. If bond markets are weaker by Monday morning, this afternoon's strength will be overshadowed. Bottom line here: rates will start Monday with a very slight advantage "all things being equal." Incidentally, the reason we don't see this advantage today is that the bond market gains were small enough and happened late enough in the day that mortgage lenders didn't update their rate sheets.
The source of inspiration for the aforementioned bond market strength was a much bigger move in stocks. The latter are generally freaking out about potential trade wars stemming from recent tariff announcements. On many occasions, big drops in stock prices correspond with improvements in rates. Rates fall when investors buy more bonds, and investors often park some of their stock-selling proceeds in the safer haven of the bond market (because there's typically much less price volatility). Stock weakness isn't moving rates nearly as much as normal these days because rates continue to face big headwinds that won't quickly subside (Fed rate hike outlook, Treasury issuance outlook, and general risks of upside economic surprises).
Loan Originator Perspective
Another sedate day in rate markets, as treasury yields again failed to break the seemingly impenetrable 2.8 barrier. Since we're near the week's best levels, I'll definitely be locking new deals closing within 30 days. -Ted Rood, Senior Originator
Once again, the benchmark 10 year note tried the weather below 2.80ish and didn't like it and quickly bounced. We are very near the lows of the current range of 2.80ish to 2.90ish, so locking is the best move. -Victor Burek, Churchill Mortgage
Current rate volatility continues to warrant locking at Origination. Consumers are more cognizant of rising rate environment due to media coverage and are seeking out alternative Lock Options. Those requests range from a Lock and Shop option to Locks with a renegotiation component in case rates drop during the contract period. -Al Hensling, Mortgage Originator
Today's Most Prevalent Rates
- 30YR FIXED - 4.5-4.625%
- FHA/VA - 4.375%
- 15 YEAR FIXED - 3.875%
- 5 YEAR ARMS - 3.5-3.75% depending on the lender
Ongoing Lock/Float Considerations
- 2017 had proven to be a relatively good year for mortgage rates despite widespread expectations for a stronger push higher after the presidential election in late 2016.
- While rates remain low in absolute terms, they moved higher in a more threatening way heading into the beginning of 2018
- The scariest part of the move higher looks like it ended as of early February, and rates have been generally sideways since then
- Even so, the potential remains for more weakness (i.e. higher rates). It makes more sense to remain defensive (i.e. more inclined to lock) until we've seen a more convincing shift lower.
- 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.