May 23, 2017
Mortgage rates began the day in decent shape with the average lender roughly unchanged versus yesterday. As the day progressed, bond markets (which dictate rates) weakened. Most lenders were forced to reissue slightly higher rates in the afternoon. Any lenders who didn't raise rates this afternoon will instead have to account for the weakness in tomorrow morning's rate sheets. In other words, some lenders will be offering higher rates tomorrow morning, even if markets don't move at all between now and then.
Over the past few days, it's not only been easy, but downright logical to dismiss mortgage rate movement as being very small in the bigger picture. While that remains true for today's mortgage rates, today's bond market movement suggests a bit more caution heading into the holiday weekend. On top of that, the rest of the week contains potential landmines for markets in the form of political headlines.
Bottom line, while rates continue hovering fairly close to 2017's lows, pressure is finally increasing for a move higher.
Loan Originator Perspective
The past few days of at or near 2.25 was enough risk and uncertainty for some clients so they decided to lock. It was a good run and I was able to lock rates up to 0.25% lower than what was originally expected. Huge win! Moving forward I would feel more "locky" the further we move from 2.25. If we can return to below 2.25 I'll move back to floating. -Jason Anker - Sr. Loan Officer
Rates have been unable to move any lower after touching the best rates of the year a few days ago. My clients are happy with today’s pricing and are locking their loans. I am concerned that bonds will continue to slowly bleed resulting in worse pricing in the days ahead. If you are within 30 days of closing, I think you should go ahead and pull trigger today on locking and don’t look back. -Victor Burek, Churchill Mortgage
Today's Best-Execution Rates
- 30YR FIXED - 4.00%
- FHA/VA - 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.