Mortgage Rates Seasonally Sideways

News

Mortgage rates were lifeless today as financial markets drifted sideways.  Although rates CAN move during the last week of December when there’s an imbalance between buyers and sellers in bond markets, that’s the exception to the rule.  We tend to see days exactly like today with effectively zero change in lender rates sheets compared to the previous business day (in this case, last Friday). 

In the bigger picture, it’s reassuring to see rates hold sideways after they spiked early last week.  That said, the sideways momentum is best viewed as symptom of the season.  We’ll know a lot more about underlying momentum in rates by the 2nd week of January.  Between now and then, there’s limited risk and limited reward when it comes to floating vs locking.  


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’ve 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.

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