November 22, 2017
Mortgage rates fell modestly today, with bond market strength both before and after the release of the Fed Minutes (a more detailed account of the Fed meeting that took place 3 weeks ago). Stronger bond markets correlate with lower rates.
Bonds tend to benefit from weak economic data, low inflation expectations, and an accommodative monetary policy stance from the Fed. Today's economic data was generally weaker, but of particular importance at the moment were the inflation expectations in the consumer sentiment data, which came in near the lowest levels since the financial crisis. The Fed Minutes also mentioned some concern over intractably low inflation, though they continue to expect a rebound based on a strong labor market.
Bond markets are already well aware the Fed is planning on hiking in December, so the smattering of inflation-related doubt was a net-positive for rates. The average lender is still quoting conventional 30yr fixed rates near or just under 4.0% on top tier scenarios. Most borrowers would see today's improvement in the form of slightly lower upfront costs.
Mortgage banks are closed Tomorrow for Thanksgiving and lenders won't be issuing rate sheets. Friday is technically a half-day for bond markets, but availability of new rates and the ability to lock them varies widely. Many lenders simply republish the same rate sheets from the Wednesday before Thanksgiving.
Loan Originator Perspective
Still range bound and I doubt this changes by Friday. We're in the lower third of the past 30 day range so I'm happy to lock at these levels. We won't get high importance data until Wed of next week so I expect to be range bound till then. -Jason Anker - Sr. Loan Officer
Today's Most Prevalent Rates
- 30YR FIXED - 4.0%
- FHA/VA - 3.75%
- 15 YEAR FIXED - 3.375%
- 5 YEAR ARMS - 2.75 - 3.25% 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've moved higher in a more threatening way heading into the 4th quarter, relative to the stability and improvement seen earlier in 2017
- The default stance for now is that this trend toward higher rates has the potential to continue. It will take more than a few great days here and there for that outlook to change.
- For weeks, this bullet point had warned about recent stability inviting a bigger dose of volatility. That volatility is now here. As such, locking is generally the better choice until the volatility is clearly dying down.
- 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.