April 17, 2017
For the third day in a row, mortgage rates set new 2017 lows this morning. But as bond markets weakened into the afternoon, several lenders recalled rate sheets for "negative reprices." This brought the afternoon's rate sheet offerings back in line with those seen on Thursday afternoon. Although that's slightly worse than this morning, rates are still effectively at 2017 lows.
The average lender continues to quote 4.0% on top tier conventional 30yr fixed scenarios. Any changes from Thursday would be seen in the form of slightly higher upfront costs. Many borrowers will see no difference.
While there were several economic reports today, investors remain more interested in geopolitical developments, stock prices, and currency fluctuations. Indeed, today's bounce in rates coincided with a bounced in the dollar index. Markets have been especially sensitive to currency fluctuations since Trump's comments last week on the dollar being "too strong."
Loan Originator Perspective
The recent trend has been in our favor as of late. Geopolitical developments across the globe, softening economic data and political dead lock are all helping. I do believe further improvements will be slow to come, so I would recommend to float unless you are within 15 days of funding. Locking on 15 days renders you the best possible pricing. -Victor Burek, Churchill Mortgage
Today's Best-Execution 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
- Investors were relatively convinced that the decades-long trend toward lower rates had been permanently reversed after Trump became president, but such a conclusion would require YEARS to truly confirm
- Instead of continuing higher in 2017, rates instead formed a narrow, sideways range, and held inside until April. Investor perceptions are shifting such that fiscal reforms and other policy developments will need to live up to expectations in order to push rates higher. Geopolitical risks would also need to avoid flaring up (more than they already have)
- For the first time since the election, we're in a rate environment where you wouldn't be crazy not to lock at every little opportunity/improvement. Until/unless it's broken, the highest rates of early-2017 mark the ceiling, and we're now waiting to see how much lower we can go from here.
- 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.