April 26, 2017
Mortgage rates were relatively unchanged today, but only after averaging the disparate changes from various lenders. That means some lenders are in much better shape versus yesterday while others are noticeably worse.
This sort of disparate movement isn't typical of mortgage rates across lenders, but it can happen when underlying bond markets experience volatility on back-to-back afternoons. That was indeed the case over the past 48 hours. Bond markets weakened (which pushes rates higher) yesterday afternoon, but only a handful of lenders issued reprices (new, higher rates, in response to intraday market movement). Today's volatility was in our favor resulting in several lenders issuing POSITIVE reprices.
Bonds made gains into the afternoon after Trump's tax plan was released. Stock markets were more optimistic about the potential details and bonds were more cautious. Both judged that they'd overshot the mark a bit, given the actual details of the announcement. In other words, stock prices and bond yields (which correspond to mortgage rates) rose more than they otherwise would have and thus had a quick correction back in the other direction.
Depending on the lender and the time of day you check in, today's rates might not have caught up to the underlying market movement yet. In those cases, you'd likely see improvements tomorrow, BUT only if bond markets don't move between now and then.
Loan Originator Perspective
Financial markets idled in place today as tonight's tax reform announcement looms. The proposal's ultimate effect on rates will depend as much on congressional reaction to it as the actual details. If it's widely embraced and perceived to raise economic growth, bonds will suffer. If it's lambasted and seen as unlikely to pass, bonds may benefit. Tough call, it could certainly go either direction. -Ted Rood, Senior Originator
It appears bonds may have finally found some support. The big tax news has come and gone, so I am hopeful that the bond sell off has ended for now. Just holding ground at current levels should allow lenders to improve pricing. At this point, I would cautiously float overnight and see if bonds can extend today’s gains. -Victor Burek, Churchill Mortgage
Today's Best-Execution Rates
- 30YR FIXED - 4.0-4.125%
- FHA/VA - 3.5 - 3.75%
- 15 YEAR FIXED - 3.25%
- 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.