Mortgage Rates Still Working on That Ceiling

Mortgage rates didn't move much today.  Most lenders were just slightly lower/better this morning, but mid-day market weakness prompted several of them to reissue higher rates.  In the bigger picture, however, the past several days represent a welcome stint of relative calm.  The general trend had been toward higher rates beginning in mid-December.

Granted, that general trend could continue and the past few business days could merely be a pause.  But the point is, whether it's a pause or the beginning of a reversal, either would begin the same way.  The important development in underlying bond markets has been resilience at the weaker (read: higher rate) levels.  Using 10yr Treasury yields as a benchmark for rate in general, we'd want 2.60% to continue to act as a ceiling.

The ingredient we're still missing is the move below an important floor.  In the current case, 2.52% would be a good first step.  A move to 2.42% would likely correspond with top tier 30yr fixed mortgage rates returning to 4.0% on average.

Loan Originator Perspectives

Bond markets idled today as stocks reached yet more record highs.  I have to wonder what rates would/will do if/when stocks ever regress, but not banking on that happening soon.  There's limited pertinent data the rest of the week, I doubt we'll see any huge pricing swings.  A few lenders have repriced worse in the last 30 minutes, I'll continue locking early. -Ted Rood, Senior Originator

Going into the close, bonds are rallying off the highs of the day thanks to stocks moving lower.   A few lenders did reprice for the worse.  If your lender was one of the few to reprice worse, i would definitely float overnight.   If not, then its a toss up.   If you can tolerate the risk, i would roll the dice overnight and see if we can break through resistance at 2.52 on the 10 year tomorrow.  -Victor Burek, Churchill Mortgage

Today's Most Prevalent Rates

• 30YR FIXED - 4.125%
• FHA/VA - 3.75% 
• 15 YEAR FIXED - 3.375%-3.5%
  
• 5 YEAR ARMS -  2.75 - 3.25% 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 4th quarter, relative to the stability and improvement seen earlier in 2017
  
  
• The default stance for now is that this trend toward higher rates has the potential to continue.  It will take more than a few great days here and there for that outlook to change.
  
  
• For weeks, this bullet point had warned about recent stability inviting a bigger dose of volatility.  That volatility is now here.  As such, locking is generally the better choice until the volatility is clearly dying down.

• 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.