Mortgage rates moved sideways to slightly higher today, keeping them in an exceptionally narrow range that’s persisted for the entire month of March. As of last Thursday, rates looked like they might make an attempt to challenge the lower boundary of that range, but they quickly backed off (or backed “up” as the case may be). Friday and today have seen a fairly steady move back toward the middle of March’s range.
Context is also important. While we can talk about “movement” in a literal sense in the past few days, for all practical purposes, the average mortgage seeker wouldn’t be seeing much of a difference. Note rates (the interest rate at the top of a mortgage “note”–the one that determines the payment when applied to a principal balance) haven’t moved at all for most scenarios in March. Effective rates (a combination of the note rate and upfront costs) have only moved a little bit.
Bond markets may not be eager to upset the status quo given the holiday-shortened work-week (bond markets closed for Good Friday)–not to mention the fact that it’s Spring Break for much of the country. In other words, prospects for bigger rate changes are pretty dim.
Loan Originator Perspective
Treasury yields sat at 2.83% today, firmly in the middle of our recent 2.8-2.9% range. Markets close mid-day Thursday for the 3.5 day weekend, and it’s unlikely any significant rally will happen by then. Still smells like “lock early” to me. –Ted Rood, Senior Originator
Bonds continue to be range bound. We are closer to the bottom, than the top so locking is the way to go. –Victor Burek, Churchill Mortgage
Today’s Most Prevalent Rates
- 30YR FIXED – 4.5-4.625%
- 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 beginning of 2018
- The scariest part of the move higher looks like it ended as of early February, and rates have been generally sideways since then
- Even so, the potential remains for more weakness (i.e. higher rates). It makes more sense to remain defensive (i.e. more inclined to lock) until we’ve seen a more convincing shift lower.
- 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.