Mortgage rates moved higher today, with most lenders quoting their highest rates in at least 2 weeks.  But before you let that worry you too much, know that the range of available rates has been so narrow over the past 2 weeks that it didn’t take much to earn that dubious distinction.  In fact, today’s rate change is pretty close to average.  It wasn’t even enough for lenders to change “note rates” (the actual interest rate applied to a loan balance).  Instead, changes are more likely to be seen in the form of the upfront costs/credits associated with any given rate quote.  

Economic data has a longstanding relationship with interest rate movement.  With that in mind, it’s fair to assume that this morning’s strong GDP report had a negative impact on rates.  But that’s not what market participants are focused on at the moment.  Tax reform (among other things) is the bigger issue at the moment.

The tax bill has had a pretty consistent relationship with rates.  The more likely it looks, the higher rates go.  If it passes, rates would probably continue higher.  That keeps the potential for volatility quite high in the coming days, especially in light of the other potential market flashpoints including a possible government shutdown.


Loan Originator Perspective

Bonds regressed today, as current Fed Chairwoman Yellen voiced concerns over national debt expansion.  My pricing was roughly 10 bps off Tuesday’s, or a cost of $100 on a $100,000 loan.  While that’s hardly a huge swing, it does mark the first day since the 17th we’ve lost ground.  With potential tax reform approval looming in the Senate, I’ll play conservatively here and lock new applications closing within 30 days.    –Ted Rood, Senior OriginatorToday

‘s Most Prevalent Rates

  • 30YR FIXED – 4.0%
  • FHA/VA – 3.75% 
  • 15 YEAR FIXED – 3.375%
  • 5 YEAR ARMS –  2.75 – 3.25% 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’ve 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.

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