Mortgage rates held relatively steady today, keeping them in line with the lowest levels in more than 3 weeks.  There was relatively little market movement in response to the policy announcement from the European Central Bank (ECB).  That's a good thing considering much of the recent gains in rates can be attributed to traders growing more optimistic about the ECB's stance.

To put all this in plain English, the ECB buys bonds.  This puts downward pressure on rates around the world (more so in Europe than in the US, but we still get some indirect benefit).  There was some concern at the end of June that the ECB was getting closer to announcing it would buy fewer bonds.  While that day will likely come eventually, today's announcement assures markets that it hasn't been discussed yet.

The relatively calm reaction in bond markets (and the absence of changes in lender rate sheets) suggests traders were already in position for this event and may be increasingly tuned out until next week.  For now, the short-term trend is positive, but we haven't been able to improve much past current levels.  Risk-averse borrowers should increasingly consider locking while risk-tolerant borrowers should simply remain on-guard for a reversal next week.  

Loan Originator Perspectives

Bond markets weathered both ECB and BOJ policy statements, as neither central banks' commentary indicated imminent tapering concerns.  My pricing today improved roughly 12 bps over yesterday's, a decent gain.  It's also increasingly apparent that tax reform (and the implied economic growth from it) will not happen this year, another bond friendly development.  Next week may bring some end of month demand, and improved pricing, I'm inclined to float short term, for the moment anyway. -Ted Rood, Senior Originator

Today's Most Prevalent Rates

• 30YR FIXED - 4.00%
• FHA/VA - 3.75% 
• 15 YEAR FIXED - 3.375%
  
• 5 YEAR ARMS -  2.75 - 3.25% depending on the lender

Ongoing Lock/Float Considerations

• Investors were relatively convinced that the decades-long trend toward lower rates had been permanently reversed after Trump became president, but such a conclusion would require YEARS to truly confirm
  
  
• Instead of continuing higher in 2017, rates instead formed a narrow, sideways range, and held inside until April.  Investor perceptions are shifting such that fiscal reforms and other policy developments will need to live up to expectations in order to push rates higher.  Geopolitical risks would also need to avoid flaring up (more than they already have)
   
• For the first time since the election, we're in a rate environment where you wouldn't be crazy not to lock at every little opportunity/improvement.  Until/unless it's broken, the highest rates of early-2017 mark the ceiling, and we're now waiting to see how much lower we can go from here.
   
• 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.