Mortgage Rates Back to Unchanged After Starting Higher

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Mortgage rates began the day at higher levels, as bond markets lost ground overnight.  Bonds dictate rates, and “losing ground” means bond prices are falling.  When bond prices fall, rates move higher.

There’s some chatter in the marketplace about developments in Syria being the motivation for every little move in bonds/rates.  Rather, it’s more accurate to say it’s ONE OF the motivations behind SOME of the moves.  Bonds had a few other concerns overnight.  That’s why they were able to improve during domestic hours even though nothing changed with respect to Syria.

As bonds improved, most lenders ended up releasing positively-revised rate sheets.  After the revisions, today’s mortgage rates ended up in substantially similar territory to last Friday’s.  Lenders who didn’t reprice are naturally still at slightly higher rates, but would be heading into tomorrow with an advantage, all other things being equal.


Loan Originator Perspective

Float cautiously after bonds held up well against Strong Retail Sales. –Al Hensling, Mortgage Originator 

Treasury yields jumped abruptly this AM, hitting levels last seen in early March.  While MBS markets held their ground, underlying treasury weakness is never encouraging.  I’m still locking early. –Ted Rood, Senior Originator

Today’s Most Prevalent Rates

  • 30YR FIXED – 4.5%
  • FHA/VA – 4.25%
  • 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.



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