Mortgage Rates Still On Vacation

Mortgage rates began the post-holiday week by holding the same sideways posture seen last week during the slow market days surrounding Thanksgiving.  Generally speaking, slow market days make for limited mortgage rate movement. 

The Monday following Thanksgiving is often something less than a full-fledged trading day for the investors that ultimately dictate interest rate momentum.  In other words, today's absence of change isn't abnormal.  There's a greater chance that we see some more movement in the coming days.

That's both exciting and ominous.  Rates are at something of a crossroads.  Put another way, rates are knocking on a floor that used to be a ceiling.  If they can make it back to the next floor down (into the range seen during the summer months), it would provide a solid indication that markets are starting to get legitimately nervous about a bigger-picture economic shift (i.e. broader declines in stocks, and decelerating growth).  Such a shift would be a big deal for long-term interest rate momentum.  It's too soon to say that's what we're seeing, but not too soon to be keeping an eye out for clues.

Loan Originator Perspective

Bonds were largely unchanged today, and my pricing mirrored Wednesday's.  There's minimal data to inform markets this week,  but month end demand might provide support.  I'm locking applications closing within 30 days.-Ted Rood, Senior Originator

With bonds holding near monthly lows, my clients are favoring to lock.  The trend continue to be toward higher rates.    Only loans I would consider floating would be those that can lock on a shorter term tomorrow such as a 15 day lock. -Victor Burek, Churchill Mortgage

Today's Most Prevalent Rates

• 30YR FIXED - 4.875-5.0%
• FHA/VA - 4.375%-4.625%
• 15 YEAR FIXED - 4.375%-4.5%
  
• 5 YEAR ARMS -  4.375%-4.875% depending on the lender

Ongoing Lock/Float Considerations 

• Rates continue coping with several big-picture headwinds, including: the Fed's rate hike outlook (and general policy tightening), 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 (which certainly seems to be the case so far in 2018).
  
  
• While rates were able to recover and stay sideways in the summer months, September and October have seen a surge up to the highest levels in more than 7 years. 
  
  
• Upward pressure can continue as long as economic growth and inflation continue running near long-term highs.  Stay defensive (i.e. generally more lock-biased).  It will take a big change in economic fundamentals or geopolitical risk for the big picture to change.  Such things tend to not happen as quickly as we'd like.

• 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.