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Rates Pushing Deep Into Post-Election Range

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After stumbling just slightly yesterday, mortgage rates returned to their recent habit of setting new 2017 lows today.  At this point, we’re getting closer and closer to post-election lows.  You’d have to go all the way back to November, 14th 2016 to see anything lower.

In specific terms, even more lenders have joined the majority in quoting conventional 30yr fixed rates of 4.0% on top tier scenarios.  The more aggressive lenders are now back into the high 3% territory (3.875% mainly, with a very small minority at 3.75%).  Many lenders are quoting the same NOTE rates as yesterday, but today’s upfront costs are moderately lower on average.  

Rates are benefiting from geopolitical uncertainty and a cooling-off of investor optimism over the Trump administration’s fiscal policy path.  

Loan Originator Perspective

The bond rally, though modest today, continues.  With the trend being our friend, I continue to favor floating until you are within 15 days of funding.   If you are planning on locking today, wait until as late as possible to allow lenders to reprice for the better.  As of about noon  today, only a couple lenders have passed along some gains, and I suspect we shall see more.  –Victor Burek, Churchill Mortgage

Bond markets continued rallying in impressive fashion today, and yields hit levels last seen in mid November. Whether it’s international tensions, fiscal disarray, or economic stagnation, bonds are benefiting. Hard not to consider floating here, as pricing typically takes longer to improve during rallies than it does to worsen during sell-offs. –Ted Rood, Senior Originator

Today’s Best-Execution Rates

  • 30YR FIXED – 4.0%
  • FHA/VA – 3.5 – 3.75%
  • 15 YEAR FIXED – 3.25%
  • 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.

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