Fed Statement Erases Morning Mortgage Rate Gains

Mortgage rates ended the day relatively close to 'unchanged,' depending on the lender.  That's somewhat surprising considering the presence of several big-ticket events on today's calendar of potential market movers.  Chief among these was the most recent installment of the Fed's policy announcement.  While the Fed wasn't necessarily expected to make any policy changes, investors were still scanning for clues about the next Fed statement.

In general, the announcement amounted to an optimistic deliver of several pessimistic developments.  Some investors were hoping the Fed would pull fewer punches on the pessimistic stuff.  In general, economic pessimism goes hand in hand with lower rates.  Due to the lack of outright pessimism, rates rose in the afternoon, albeit only slightly.

Several lenders who had been offering lower rates in the morning, reversed course with mid-day reprices.  By the end of the day, the average lender was right back at Tuesday afternoon's latest levels. 

The current environment continues to be one of higher risk and reward when it comes to floating vs locking.  Both stocks and bonds look increasingly ready to make a bigger move in either direction.  They're just waiting for the right motivation.  It didn't come today, but that's increasingly likely to change over the next 3 business days.

Loan Originator Perspective

We had no whammies from the Fed today, but that still hasn’t stopped bonds from moving higher.   With jobs report up next on Friday, it is highly risky to float.   I find that my clients are choosing to lock in at current pricing to avoid their rate jumping higher.  As a reminder, rate sheets get worse much quicker than they ever get better.  With the 10yr unable to break back below 2.28, its time to lock.  -Victor Burek, Churchill Mortgage

Today's Fed Statement was essentially a non-event, as it contained no surprises or significant changes from the prior statement.  Bond markets were flat in mid afternoon trades, and my pricing was ever-so-slightly better than yesterday's.  Friday's April NFP jobs report is the next economic data of note.  The jobs report and congressional discord over tax/healthcare reform may determine whether rates stay within the current range or not.  Within 30 days of closing?  If you're risk averse, good time to lock.  If you're further than 30 days from closing, lock/float decision will depend on personal risk tolerance and goals. -Ted Rood, Senior Originator

Today's Best-Execution Rates

• 30YR FIXED - 4.0-4.125%
• FHA/VA - 3.5 - 3.75%
• 15 YEAR FIXED - 3.25%
  
• 5 YEAR ARMS -  2.75 - 3.25% depending on the lender

Ongoing Lock/Float Considerations

• Investors were relatively convinced that the decades-long trend toward lower rates had been permanently reversed after Trump became president, but such a conclusion would require YEARS to truly confirm
  
  
• Instead of continuing higher in 2017, rates instead formed a narrow, sideways range, and held inside until April.  Investor perceptions are shifting such that fiscal reforms and other policy developments will need to live up to expectations in order to push rates higher.  Geopolitical risks would also need to avoid flaring up (more than they already have)
   
• For the first time since the election, we're in a rate environment where you wouldn't be crazy not to lock at every little opportunity/improvement.  Until/unless it's broken, the highest rates of early-2017 mark the ceiling, and we're now waiting to see how much lower we can go from here.
   
• 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.