July 28, 2017
Mortgage rates were generally flat today, despite improvements in underlying bond markets. Although several lenders did offer price improvements throughout the course of the day, the improvements were generally "token" in nature and did little to alter the sense of paralysis in the bigger picture. This is the third straight day with essentially no change.
Uncertainty, fear, a lack of inspiration, or some combination of the three all have the ability to paralyze rates from time to time. Uncertainty is leading the charge at the moment. On the one hand, we have global central banks chomping at the bit to drain the proverbial punch bowl (buying fewer bonds and raising rates). On the other hand, those central banks admit they can't be too aggressive without justification from rising inflation, and inflation seems to be in short supply based on recent economic data.
Next week brings one of the more important inflation reports on Tuesday. If it makes a strong statement for better or worse, it could certainly coax mortgage rates out of their exceptionally flat range seen over the past few days. From there, we'd be waiting for bigger moves to break the generally flat, narrow range that's been intact over the past few months.
Loan Originator Perspectives
With bonds in the green following weak inflation data and news out of North Korea regarding a missile launch, i think it is worth the risk to float over the weekend. Currently, rate sheets do not reflect the price gains. If you do want to lock today, wait until as late as possible to allow time for lenders to pass along the gains, but with today being a Friday, not so sure we will see them. -Victor Burek, Churchill Mortgage
Today's Most Prevalent Rates
- 30YR FIXED - 4.00%
- 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.