Mortgage rates fell for the third day in a row–the first time that’s happened so far in 2018! Much like last week was slightly less spectacular than its “best in 2018” designation, today also comes with caveats. Even though rates technically did fall for the third straight day, most of the day was spent with underlying bond markets moving into weaker territory. This resulted in several lenders raising rates in the middle of the day, leaving them roughly in line with Friday’s latest offerings.
All of the above places increased emphasis on the coming days. If bonds and rates can manage to continue holding their ground (or even improving) we could finally begin to say that “something different” is happening in 2018. To be clear, there is no implication for lock/float strategy just yet. The broader trend is still unfriendly and undefeated. But the underdog has gotten a few good punches in, and it’s only natural to hope for an upset.
Loan Originator Perspective
Bond markets opened strongly this morning, but the gains evaporated by midday. It’s the same scenario we’ve seen several times lately, we get a day/two of lower rates, but can’t sustain any momentum. The trend is still towards higher rates, locking early is still the best course of action for all but highly aggressive/”action loving” borrowers. –Ted Rood, Senior Originator
Today’s Most Prevalent Rates
- 30YR FIXED – 4.625%
- FHA/VA – 4.375%
- 15 YEAR FIXED – 3.875%
- 5 YEAR ARMS – 3.5-3.75% 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 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.