August 2, 2017
Mortgage rates held steady today, keeping them in line with the best levels in just over a month. That means the best-qualified borrowers putting more than 20% down are seeing conventional 30yr fixed rates of roughly 4%, depending on the lender. Some are quoting rates in the 3.75-3.875% range, but points and fees may vary. As always, it's a good idea make sure you're looking at all lender-related fees when comparing any two rate quotes. These can include things like origination, discount points, processing, and admin fees.
Today brought the release of economic data that has a track record of inspiring movement in the bond markets that underlie mortgage rates. Inspiration was lacking in today's ADP Employment Report, which many view as a take-it-with-a-grain-of-salt barometer for the all-important Employment Situation data that typically follows 2 days later. ADP reported 178k new payrolls versus a median forecast of 185k.
The nearness to the forecast could easily explain an absence of inspired movement, but beyond that, financial markets are relatively less interested in labor market data at the moment. Instead, the inflation-specific reports have garnered the most attention as inflation has been the biggest deterrent of more aggressive rate hikes and policy tightening from the Fed. We don't have any big inflation data this week, but Friday's jobs numbers are still a big enough deal that we should respect their potential to cause volatility.
Loan Orginator Perspective
Bonds have managed to hold onto all the recent gains of the past couple days. With non farm payrolls coming on Friday, it is fairly common to see bonds weaken heading into the report. With bonds so far today, unable to make new lows, most of my floating clients are taking advantage of the improved rate sheets and locking today. -Victor Burek, Churchill Mortgage
Bonds hovered near unchanged today, as traders prepped for Friday's NFP Jobs Report. My pricing mirrored Tuesday's. NFP might/might not move bonds, but our narrow recent range holds the potential for significant movement, when (not if) the range breaks. With no clear trend for the moment, I am locking most new applications early in the process. -Ted Rood, Senior Originator
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.