Mortgage rates moved slightly higher after a strong run to the lowest levels of the year as of last Friday.  In general, financial markets moved toward safer investments (like bonds) heading into the weekend.  When demand for bonds increases, rates move lower.  As the new week got underway, market participants warmed back up to the notion of risk, thus undoing some of the positivity from late last week.

Investors are curious to hear what President Trump has to say at his "address of the joint session" tomorrow night, especially after today's promise that there would be big announcements on infrastructure spending.  Markets have been eager to get more clarity on fiscal programs.  If the details are well-received, we could continue to see  more momentum toward risk, and rates could continue to move higher.

For now, rates are still much closer to 2017's lows.  Most borrowers would be quoted the same rate as last Friday, but with slightly higher upfront costs today.  The average lender continues to quote 4.125% on top tier scenarios, though there are a few lenders at 4.0% and 4.25%.

Loan Originator Perspective

New day, but same old pattern in bond markets today.  Since we closed last week near the bottom of our recent range, we (of course) lost some ground today, moving back towards 2.4% on treasury yields.  There's a great deal of speculation over tomorrow's address by President Trump, and how growth inducing/inflationary his budget details will be.  My pricing is somewhat off from Friday's, with slightly lower lender credits today.  Tomorrow's a wild card, so unless you don't mind the gamble, today's looking like a lock day to me. -Ted Rood, Senior Originator

Today's Best-Execution Rates

• 30YR FIXED - 4.125%
• FHA/VA - 3.75-4.25%
• 15 YEAR FIXED - 3.375-3.5%
  
• 5 YEAR ARMS -  2.75 - 3.25% depending on the lender

Ongoing Lock/Float Considerations

• Rates had been trending higher since hitting all-time lows in early July, and exploded higher following the presidential election

• Some investors are increasingly worried/convinced that the decades-long trend toward lower rates has been permanently reversed, but such a conclusion would require YEARS to truly confirm
  
  
• With the incoming administration's policies driving a large portion of upward rate momentum, mortgage rates will be hard-pressed to return to pre-election levels until well after Trump takes office.  Rates can move for other reasons, but it would take something big and unexpected for rates to get back to pre-election levels. 
   
• We'd need to see a sustained push back toward lower rates (something that lasts more than 3 days) before anything less than a cautious, lock-biased approach makes sense for all but the most risk-tolerant borrowers. 
   
• As always, please keep in mind that the rates discussed generally refer to what we've termed 'best-execution' (that is, the most frequently quoted, conforming, conventional 30yr fixed rate for top tier borrowers, based not only on the outright price, but also 'bang-for-the-buck.'  Generally speaking, our best-execution rate tends to connote no origination or discount points--though this can vary--and tends to predict Freddie Mac's weekly survey with high accuracy.  It's safe to assume that our best-ex rate is the more timely and accurate of the two due to Freddie's once-a-week polling method).