May 16, 2017
Compared to yesterday, mortgage rates are either a little bit higher or lower depending on the lender at the moment. On average, they've inched just past last Friday's levels, meaning they're the lowest in 2 weeks.
As nice as that sounds, it's worth noting that we're really splitting hairs here. Most anyone pricing out a mortgage right now won't see any difference in their rate quote over the past few days. The biggest drop occurred last Friday and we haven't seen appreciable movement since then. Most lenders continue to quote conventional 30yr fixed rates in a range of 4.0-4.25% for top tier scenarios, with 4.125% being the most prevalent. 4.0% is the runner-up and the laggards are still up at 4.25%.
In the bigger picture, we've been looking for confirmation that the recent trend toward higher rates, which began in mid-April, had run its course. While today's improvement doesn't resoundingly offer that confirmation, it's good enough to consider the previous trend defeated for now. Risk-averse borrowers can view this as a cue to lock. Risk-tolerant borrowers can view it as license to keep floating and hoping for more improvement (as long as they're prepared to lock if things take a turn for the worse).
Loan Originator Perspective
Another sideways day in the range. No change to my lock float stance, recommending float if we’re under 2.42 in the hope of revisiting 2.1. On sideways days I like to keep in mind that floating can have two benefits. Both time and market improvements can help improve rates for borrowers. A 45 day lock can be more attractive than a 60 day lock in most instances. -Jason Anker - Sr. Loan Officer
Stocks swooned, and bonds posted marginal gains today. My pricing improved slightly from Monday's. It's still too early to know whether we've snapped rates' recent upward trend or just paused it. Borrowers within 30 days of closing should have a detailed risk/reward lock discussion with their loan officer. Guess I'm conservative, but sure tempting to grab these gains. -Ted Rood, Senior Originator
Today's Best-Execution Rates
- 30YR FIXED - 4.125%
- FHA/VA - 3.75 - 4.0%
- 15 YEAR FIXED - 3.375%-3.5%
- 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.