Mortgage Rates Continue Modestly Higher

Mortgage rates moved higher for the second straight day amid a general lack of actionable information.  Some investors noted that the results of the elections in the U.K. were surprising, but not in a way that was any help to interest rates.  In general, rates found most of their motivation from the absence of significant drama in this week's Comey hearing.  Despite the modest increase, conventional 30yr fixed rates are still very close to their best levels of the year.

An exceptionally busy calendar in the coming week could also be causing some anxiety for market participants (the traders whose decisions affect rates on a day-to-day basis).  In addition to several important economic reports, we'll also hear from the Fed on Wednesday.  The Fed is almost certain to hike rates at this meeting, but investors are more interested in any changes to the Fed's verbiage and forward rate-hike forecasts.  

With rates still close to long-term lows, risk-averse clients are well within their rights to err on the side of locking.  Even the moderately risk-tolerant clients may wish to consider the fact that rates have bounced twice now at inflection point seen in mid-April.  More risk-tolerant clients can continue taking heart in the fact that the broader trend has been toward lower rates, both over the past 30 years and the past 3 months.  If you choose to float, just make sure you have a strategy in place with your loan originator.

Loan Originator Perspective

We failed to maintain levels under the post election technical gap but we are holding under 2.22 - 2.25 so all is not lost.  This could simply be markets taking a breather ahead of the next attempt.  If you didn't lock in the 2.1 range I'd simply keep 2.22-2.25 in mind as a ceiling.  -Jason Anker - Sr. Loan Officer 

I continue to favor floating.  Bonds opened up weaker this morning, so rate sheets are priced accordingly.  But as the day has progressed, bonds seemed to have found some support and have regained about half the losses.  Lenders will be slow to pass along these gains which makes floating over the weekend in my opinion a acceptable risk. -Victor Burek, Churchill Mortgage

Bonds continued their orderly retreat today, and pricing worsened slightly (again).  We're still far closer to the year's best pricing than the worst, so absolutely nothing wrong with locking here.  Next week brings a Fed statement and press conference, with the potential to radically influence rates.  Have a great weekend.  -Ted Rood, Senior Originator

Today's Most Prevalent Rates

• 30YR FIXED - 3.875-4.00%
• FHA/VA - 3.5-3.75% 
• 15 YEAR FIXED - 3.125-3.25%
  
• 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.