Mortgage Rates Back to Unchanged After Starting Higher

April 16, 2018

Mortgage rates began the day at higher levels, as bond markets lost ground overnight.  Bonds dictate rates, and “losing ground” means bond prices are falling.  When bond prices fall, rates move higher.

There’s some chatter in the marketplace about developments in Syria being the motivation for every little move in bonds/rates.  Rather, it’s more accurate to say it’s ONE OF the motivations behind SOME of the moves.  Bonds had a few other concerns overnight.  That’s why they were able to improve during domestic hours even though nothing changed with respect to Syria.

As bonds improved, most lenders ended up releasing positively-revised rate sheets.  After the revisions, today’s mortgage rates ended up in substantially similar territory to last Friday’s.  Lenders who didn’t reprice are naturally still at slightly higher rates, but would be heading into tomorrow with an advantage, all other things being equal.

Today’s Best Execution Rates

Conventional 30 yr fixed 4.50% +0.00
Conventional 15 yr fixed
3.90% +0.01
FHA 30 Year Fixed 4.25% +0.00
Jumbo 30 Year Fixed 4.52% +0.01

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 beginning of 2018
  • The scariest part of the move higher looks like it ended as of early February, and rates have been generally sideways since then
  • Even so, the potential remains for more weakness (i.e. higher rates).  It makes more sense to remain defensive (i.e. more inclined to lock) until we’ve seen a more convincing shift lower.