February 8, 2018
Mortgage rates continued higher today, bringing the average 30yr fixed rate to another new multi-year high. That said, rates may vary quite a bit from lender to lender for several reasons. First, intraday volatility is back with a vengeance. For much of 2017, lenders were less likely to change rates in the middle of the day than to simply leave the morning rate sheet intact through all the little ups and downs in bond markets. Now that those ups and downs are getting bigger, lenders are much more willing to reissue rate sheets--sometimes several times a day.
In today's case, rates began at the worst levels in more than 4 years, but mid-day bond market improvements allowed quite a few lenders to offer better rates in the early afternoon. Those afternoon rates were thus slightly lower than "the highest in more than 4 years."
Rates have varied quite a bit from lender to lender as well. Even at the same lender, the previous gaps that existed between 30yr, 15yr, jumbo, ARM, and FHA loans have been in a state of flux amid the market volatility. The closest thing we have to common thread is a top tier conventional 30yr fixed quote having moved up to roughly 4.5%, with more than a few lenders up to 4.625%.
While there's always a chance that rates are close to finding their first major ceiling in 2018, it's safer to assume they can continue to move higher until we see clear evidence to the contrary. Rest assured, whenever that evidence emerges, you'll hear it here first.
Loan Originator Perspective
Bond (and equity) markets continued their recent wild rides today. Despite a mid day rally, MBS were down significantly by afternoon trading. My pricing was off about 30 bps from yesterday's, which was off from Tuesday's......you get the picture. Locking early is the ONLY way to know what pricing you'll get. Both short term and long term trends point to higher rates, and betting against them by floating is foolhardy. -Ted Rood, Senior Originator
Today's Most Prevalent Rates
- 30YR FIXED - 4.5%
- FHA/VA - 4.25%
- 15 YEAR FIXED - 3.625-3.75%
- 5 YEAR ARMS - 3.375-3.75% 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.