January 24, 2018
After taking just one day off from the prevailing move higher, mortgage rates were back at it today, heading back to the worst levels in more than 9 months. The average lender is now back in line with the highs seen 2 days ago on Monday afternoon. Over slightly longer time-frames, rates have risen an eighth of a percentage point since last week, a quarter of a point from 2 weeks ago, and 3/8ths of a point since mid December. That makes this the worst run since the abrupt spike following 2016's presidential election.
Unfortunately, this trend won't necessarily stop simply because things have "gotten bad." While it's true that the economic effects of higher and higher rates will eventually have a self-righting effect, that could take months--even years to play out. While this doesn't necessarily mean that rates will continue a linear trend higher in the coming months, it does mean the current trend is not our friend, and that it would take some huge changes in bond market trading levels before it made sense to lower our defenses.
Loan Originator Perspectives
Gosh, bonds sold off today, and pricing worsened. What a shock! I've seen a number of bond market sell-offs over the years, and this market certainly qualifies. Yesterday's "dead cat" rally appears to have been a mirage. I'm locking early until further notice, see no reason to float here. -Ted Rood, Senior Originator
Today's Most Prevalent Rates
- 30YR FIXED - 4.25-4.375%%
- FHA/VA - 4.0-4.25%%
- 15 YEAR FIXED - 3.625%
- 5 YEAR ARMS - 3.0-3.5% depending on the lender
Ongoing Lock/Float Considerations
- 2017 had proven to be a relatively good year for mortgage rates despite widespread expectations for a stronger push higher after the presidential election in late 2016.
- While rates remain low in absolute terms, they moved higher in a more threatening way heading into the 4th quarter, relative to the stability and improvement seen earlier in 2017
- The default stance for now is that this trend toward higher rates has the potential to continue. It will take more than a few great days here and there for that outlook to change.
- For weeks, this bullet point had warned about recent stability inviting a bigger dose of volatility. That volatility is now here. As such, locking is generally the better choice until the volatility is clearly dying down.
- 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.