Mortgage rates have been higher almost exclusively for the past 2 weeks.  Yesterday was no exception as the Federal Reserve released a rate hike forecast that was slightly more optimistic than markets were expecting.  By yesterday afternoon, the average 30yr fixed mortgage rate was at its highest levels in over a month.  

The Fed news justified a defensive stance among prospective mortgage borrowers.  When rates move initially higher following a Fed announcement, it’s all too common to see that momentum continue in the following day.  In today’s case, we’ve actually seen a bit of support.  Underlying bond markets were in slightly better shape vs yesterday for most of the day, thus allowing lenders to either keep mortgage rates unchanged or to bring them marginally lower.

4.0% remains the most prevalently-quoted conventional 30yr fixed rate on top tier scenarios, but some borrowers may see slightly lower upfront costs today.  

Loan Originator Perspective

The good news is that bond markets didn’t continue their recent sell-off today.  The bad news is that we didn’t post gains, either.  Whether today’s inaction is merely a lull in our march to higher rates or signals an end to it is the question of the day.  It’s going to take more than a flat day to get me bullish on this market again, float with caution, or not at all.  –Ted Rood, Senior Originator

Bonds have found pretty good support around 2.28 on the 10 year treasury note.   I have been advising locking for well over a week, but with bonds finding some support, i think it may be worth the risk to consider floating overnight.  If you do float, stay in close contact with your LO.  if 2.28 does break, then you better lock up quick. –Victor Burek, Churchill Mortgage

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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