Mortgage rates improved moderately today, making this the 4th straight business day without any new weakness (aka “higher rates”). It’s necessary to include “days that haven’t been bad” in that tally because two of them merely saw rates hold flat. That’s about as much of a victory as we have been able to hope for ever since Septembers abrupt little rate spike began just over 2 weeks ago.
What are we talking about here in terms of actual damage? Well, not much in the bigger picture. In worst-case scenarios, some borrowers may have seen their rate quotes move an eighth of a percentage point higher during this time. In general, “improvement” and “deterioration” have been best-measured by the upfront costs associated with any given rate quote while conventional 30yr fixed rates themselves have remained in a 3.875%-4.00% range for top tier scenarios.
Loan Originator Perspective
If you can tolerate the risk and afford to be wrong, i continue to favor floating. Bonds are holding under solid support just over head of current levels. Investors continue to keep an eye on what is happening overseas which should help bonds at least hold onto current levels which gives lenders time to pass along gains. As of about 2pm eastern, bonds are starting to make a move lower so if you plan to lock today, wait until as late as possible. –Victor Burek, Churchill Mortgage
Bond markets lingered near unchanged today, as North Korean rhetoric cooled. My pricing is similar to yesterday’s. We may pick up some month-end bond demand the new few days, so floating for a day or two might be worth considering, for borrowers with some risk tolerance. –Ted Rood, Senior Originator
Today’s Most Prevalent Rates
- 30YR FIXED – 3.875-4.0%
- FHA/VA – 3.5%
- 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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