Mortgage rates moved higher on average today, although a few lenders were better characterized as “unchanged.” In either case, if you’re shopping for a loan, you probably won’t see a different rate at the top of today’s quote when compared to yesterday. Change would only be measured in the form of slightly higher upfront costs (or lower lender credit, depending on the scenario).
In terms of the underlying financial markets that drive rates, the first two days of this week have been fairly calm and uneventful. The globally interconnected nature of financial markets deserves part of the blame for that as holidays have kept traders at home in Asia yesterday and Europe today. The level of activity and potential volatility should increase tomorrow. Not only will overseas markets be back in action, but the domestic calendar also has several important events including the ADP Employment report in the morning (occasionally treated as a prelude to the big jobs report on Friday) and the Fed Announcement in the afternoon. While the Fed is not even remotely expected to hike rates again at this meeting, investors are always tuned in to the verbiage of the announcement in case it offers clues about the future policy path.
Loan Originator Perspective
Rate markets idled in place today, awaiting tomorrow’s Fed statement and Friday’s NFP jobs report. Not sure what it’ll take to incite a significant rally here, but reasonably sure we won’t get one soon. I’m still locking early. –Ted Rood, Senior Originator
Rates seem stable at this time, bias towards floating cautiously. – Al Hensling
Today’s Most Prevalent Rates
- 30YR FIXED – 4.625%-4.75%
- FHA/VA – 4.25%-4.5%
- 15 YEAR FIXED – 4.0%
- 5 YEAR ARMS – 3.625%-3.875% 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 been moving higher in a serious way due to headwinds that cannot be quickly defeated. These include the Fed’s increasingly restrictive monetary policy outlook, the increased amount of Treasury issuance to pay for the tax bill (higher bond issuance = higher rates), and the possibility that fiscal stimulus results in higher growth/inflation.
- While we may see periodic corrections to the broader trend toward higher rates, it’s safer to assume that broader trend can and will continue. Until that changes, it makes much more sense to remain heavily-biased toward locking as opposed to floating.
- 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.