October 5, 2017
Mortgage rates moved higher today, bringing the average lender back near 4% in terms of conventional 30yr fixed quotes for top tier scenarios. Most lenders were back in line with last Thursday's rates, which were the highest in roughly 2 months.
In terms of day to day changes, nothing about the recent mortgage rate environment is terribly alarming. It's only when you add up each day's movement over the past 3-4 weeks that things look a bit more serious. During that time rates have risen as much as any other comparable period of time in nearly a year. The biggest concern would be that "this time is different" and that instead of bouncing back down into a calm, narrow range that's prevailed for most of 2017, rates continue back up into the 4's.
It's still a bit too soon to start freaking out about that eventuality, but it's just the right time to be defensive about it. That means locking will make more sense than floating until we see a firm bounce back toward lower levels.
Tomorrow brings increased prospects for volatility due to the big jobs report (officially, the "Employment Situation") released in the morning. This report always has the potential to push rates more quickly in either direction depending on much better or worse the numbers come in versus expectations.
Loan Originator Perspective
Rates continued marching upward today, and treasury yields again touched their highest levels since August (2.35%). This is still no time to float, my pipeline is locked, and I'll remain in "lock-early" mode until these daily sell-offs cease. -Ted Rood, Senior Originator
Today's Most Prevalent Rates
- 30YR FIXED - 3.875-4.0%
- FHA/VA - 3.5%
- 15 YEAR FIXED - 3.25%
- 5 YEAR ARMS - 2.75 - 3.25% depending on the lender
Ongoing Lock/Float Considerations
- 2017 has 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. Most of the rate spike was done by the end of 2016 and we've generally moved sideways to lower since then
- The biggest question is whether or not this counter-intuitive trend has an expiration date. Rates haven't been immune from brief corrections back toward higher levels, and each correction causes concern that the good times are over.
- Despite those concerns, we've seen rates make new lows in April, June, and September. Although rates have been rising since early September, they'd have to move even higher before we'd consider a change in the bigger picture theme.
- All of the above having been said, past precedent suggests we're due for a much bigger dose of volatility some time soon.
- 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.