Mortgage Rates on Autopilot Ahead of Holiday Week


Mortgage rates haven’t moved for 3 straight days now.  In fact, if you’re not too concerned with minutia, there hasn’t been any major movement in weeks.  Unless something big happens in financial markets soon, we shouldn’t expect that to change next week 

Rates are driven by bonds, and bonds are traded by humans (or algorithms written by humans).  Many of those humans are on vacation at the moment, having taken advantage of the lull in the market calendar between now and next week’s 4th of July holiday.  Markets will be closed on Wednesday and will close early on Tuesday.  Point being: there’s not an exceptionally vibrant marketplace underlying mortgage rate movement at the moment.

After the holiday, however, volatility potential increases.  Traders will be getting back to the office in greater numbers and the last part of the week brings several important economic reports.

Loan Originator Perspective

It was a sedate week in rate markets, but Monday brings a new month and June’s jobs report.  With rates at their lowest levels of the month, the bulk of my clients are locking early.  Happy Weekend! –Ted Rood, Senior Originator

Today’s Most Prevalent Rates

  • 30YR FIXED – 4.625-4.75
  • FHA/VA – 4.25-4.5%
  • 15 YEAR FIXED – 4.125%
  • 5 YEAR ARMS –  3.75-4.25% depending on the lender

Ongoing Lock/Float Considerations

  • Rates have 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.

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