August 30, 2017
Mortgage rates were technically higher today vs yesterday, but unless you've been following day-to-day movements under a microscope, you probably won't mind. Reason being: apart from yesterday, today's rates are still easily the best we've seen since early November 2016. Most of yesterday's rate quotes will be the same, though the upfront costs may be slightly higher today. 3.875% remains the most prevalent top-tier 30yr fixed rate.
In general, the bond markets that underlie mortgage rate movement have been doing a good job of maintaining their composure at the best levels of the year. Given that yesterday's improvement was motivated by unexpected headlines (North Korean missile launch) it wouldn't have been a surprise to see a sharper pull-back today. That said, the coming days are not without risk, and yesterday's lock/float thoughts remain relevant (i.e. the persistent improvement in rates adds to the potential for a pull-back).
The next 2 days have the biggest movement potential of the week as far as scheduled events are concerned. There are several important economic reports as well as the more active trading associated with the final day of the month (not to mention the first day of the following month).
Loan Originator Perspective
My clients and I continue to favor locking once within 30 days of closing. Bond traders do not seem willing to push yields lower than current levels. With non farm payrolls on Friday, I believe it is wise to just lock in.-Victor Burek, Churchill Mortgage
Bonds tread water today as we start to establish a new, lower, rate range. This morning's economic data surpassed estimates, which might have triggered a bond sell off, but didn't. That resilience is a bullish bond indicator. August's NFP jobs report will be released Friday; it'll be interesting to see how that affects markets. Hard to pass up the lowest rates since the election for folks closing within 30 days however. -Ted Rood, Senior Originator
With the news on Monday that N Korea fired another missile, this time over Japan, bond markets ran for cover and pushed below a key technical pivot point in the 10 yr yield. Since then we've drifted slightly higher off the lows and almost back to where we were on Monday prior to N Korea news. With month end bond buying it is difficult to tell where the momentum lies. That said we are still at this year's lows so I'm recommending locking in at these rates. -Geoff Allison Blue Skye Lending NMLS #200002
Today's Most Prevalent Rates
- 30YR FIXED - 3.875
- FHA/VA - 3.5%
- 15 YEAR FIXED - 3.125%
- 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.