March 5, 2018
Mortgage rates ended higher today, after financial markets reacted to developments in last week's tariff-related news. Last Thursday, stock prices and interest rates fell in response to the tariff announcement because investors figured it ran the risk of doing more economic harm than good. In general, economic weakness/risks/fear tends to push rates lower.
Today, congressional leaders made statements that effectively opposed the tariffs as written. In fact, one Republican source said not to rule out "potential action" in the near future if Trump continues with the Tariff plan. Much like the initial news hurt stocks and helped rates last week, the potential reversal or mitigation of that news did the opposite today. Stocks prices and bond yields rose in concert. In general, when bond yields rise enough during the day, mortgage lenders will adjust their rate sheets for the worse (a so-called "negative reprice). Most lenders repriced today, taking rates to higher levels in the early afternoon.
Loan Originator Perspective
Bond markets regressed slightly Monday, and numerous lenders worsened their pricing by early PM. While we're not quite at February's worst levels, we're sure close. Locking early is still the prudent option. Ted Rood, Senior Originator
Today's Most Prevalent Rates
- 30YR FIXED - 4.5-4.625%
- FHA/VA - 4.375%
- 15 YEAR FIXED - 3.875%
- 5 YEAR ARMS - 3.5-3.75% 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.