Mortgage Rates Sharply Sideways

Mortgage rates haven't moved much at all recently.  While that leaves us little to talk about if we're examining rate changes on a daily basis, it's a fair trade when the lack of movement is keeping rates in line with the best levels since November 2016.  Only a handful of days have been any better than today, and all of them were recent.  Moreover, most lenders didn't move enough from yesterday for there to be any detectable difference in today's rate sheets.  In other words, it's just another day with the lowest rates of the year.

What's it going to take for this to change?  After all, it's not likely to go on forever.  In part, the sideways grind is a symptom of the summertime trading environment for bond markets (which underlie mortgage rates).  Traders tend to take stronger stands heading into the Fall months (already, I know...) and upcoming events will provide more motivation for movement.  

In part, traders are curious to see how monetary policy unfolds both at the Fed and the European Central Bank (ECB).  Although we haven't seen any market-moving headlines yet, central bankers are gathered in Jackson Hole, WY today and tomorrow for an annual symposium that holds some potential to produce actionable news.  That said, it's really the official central bank announcements in September that stand the best chances to stir the pot.  Between now and then, day-to-day risks and rewards are muted.

Loan Originator Perspective

Treasury yields hovered just under 2.2% today, but failed to add to yesterday's rally.  We're basically mired at the bottom of our recent range, which is better than being mired at the top.  I don't foresee the Fed's J-Hole meeting revealing any earth shattering economic news.  Like your pricing?  Why not lock?  If floating, don't get greedy, rates go both down and up.  -Ted Rood, Senior Originator

Today's Most Prevalent Rates

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