Mortgage rates held their ground yesterday.  That was a refreshing development given the abrupt move higher over the past 2 weeks and a relatively threatening reaction to Wednesday’s Federal Reserve events.  Now again today, rates have managed to hold their ground.  In some cases, lenders improved by token amounts.  If yesterday was refreshing, today would be doubly so.

But the refreshment comes with caveats.  We don’t really know what the natural direction would have been for rates today because underlying markets were clearly affected by overnight headlines regarding North Korea potentially testing an ICBM with a Hydrogen warhead in the Pacific Ocean.  In general, these sorts of headlines lead investors to shed risk–something that frequently takes the form of selling stocks and buying bonds.  When investors buy bonds, rates move lower.

Bottom line, the North Korea news helped bond markets (which drive mortgage rates) overnight, and investors were hesitant to push back too hard against that bond rally.  This means we’ll be waiting until next week before being able to see whether or not this recent display of resilience can stand on its own two feet.

Loan Originator Perspective

More headlines regarding North Korea has helped bonds rally overnight and today.  The gains are quite modest, but you should be seeing better rate sheets.  With today being a Friday, i will continue to float.  We still have solid support just overhead of current lenders which i feel will continue to hold.  And by floating, you are open to any opportunity that more headlines break that could send rates lower.  –Victor Burek, Churchill Mortgage

Rates improved slightly today, as investors pondered whether bond markets are oversold and North Korea’s chances of attempting a hydrogen bomb test outside their border.  Being oversold could lead to moderate pricing gains, a NK nuclear test outside of NK might provoke larger movement.  Today’s a chance for risk averse borrowers to lock their rate and eliminate that uncertainty from their loan.  Floaters who enjoy “action” may want to see what happens from here.  Happy Friday. –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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