The Top Still Isn't In For Mortgage Rates

By: Matthew Graham •

Mortgage rates had another rough day as they continued moving up into new 4-year highs.  Unlike the extremely mild and uneventful day-to-day changes seen for most of the past 2 months, rates are actually putting some distance between themselves and the March plateau. 

Whereas a well-qualified borrower with 25% down may have been quoted a conventional 30yr fixed rate of 4.5% a few weeks ago, they'd already be looking at 4.75% today for most lenders.  Of course this can vary a bit from lender to lender, but the point is that all lenders have experienced that sort of delta.

Will it ever stop?  Yo! I don't know!  Actually I do know.  The answer is yes, but I don't know when.  Rates could (and SHOULD, if we're being honest) continue even higher from here.  They may not do so in a straight line, but barring an unforeseen market shock, today's rates aren't the highest you'll see in 2018.

 See Rates from Lenders in Your Area


Loan Originator Perspective

LOCK!  Duck and cover!  Looking for evidence that rates have peaked and not finding any.  The only hope we have is Dec. 2013/Jan 2014 levels could be upper resistance.  Time will tell but it's not safe to gamble right now.    -Jason Anker - Loan Officer 

The bond market has been slip sliding away for a while.  All short term clients are locked.  The greater question I discuss with clients is whether to lock at say 45 or 50 days.  Most are conservative and want to take risk off the table then as well.  Until there's a reversal, we have to assume rates climb. -Matt Hodges


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.