April 11, 2017
Mortgage rates moved lower today--significantly in some cases--with the average lender making it back to 2017's lows for the first time since January. Rates came close to 2017's lows in late February and again last week before officially crossing the line today.
Bond markets (which drive mortgage rates) benefited from investors seeking safe haven after headlines broke regarding North Korea's nuclear threats against South Korea and The U.S. Other geopolitical considerations regarding Russia's potential involvement with Syrian gas attacks and the French election added to the bond market gains. As bonds gain ground, prices rise and rates move lower.
Lenders are now fairly evenly split between 4.0% and 4.125% in terms of the most prevalent conventional 30yr fixed quote on top tier scenarios. A few of the most aggressive lenders are now quoting rates in the high 3's (emphasis on "few"), and there are still more than a few lenders up at 4.25%.
Loan Originator Perspective
Bonds rallied again today, as saber rattling and a stock sell-off provided bond buyers ample motivation. It's safe to say we're either in a holding pattern or on the verge of a rally. There's certainly no motivation to lock early this PM since some lenders are still improving their pricing. I'm willing to see where this market goes short term, will likely float new applications today. -Ted Rood, Senior Originator
Today's Best-Execution Rates
- 30YR FIXED - 4.0-4.125%
- FHA/VA - 3.75%
- 15 YEAR FIXED - 3.375%
- 5 YEAR ARMS - 2.75 - 3.25% depending on the lender
Ongoing Lock/Float Considerations
- Some investors are increasingly worried/convinced that the decades-long trend toward lower rates has been permanently reversed, but such a conclusion would require YEARS to truly confirm
- Still, it would take something very big and unexpected for rates to make a big, sustained push back toward pre-election levels. Even then, it would take time to confirm such a shift.
- With fiscal and monetary policy paths both clearly putting pressure on rates, at least one of those would need to make a noticeable change before anything but a cautious, lock-biased approach makes sense as a baseline strategy. Floating should only be considered as a tactical opportunity to capitalize on temporary corrections.
- 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.