It's Thursday, which is when Freddie Mac's weekly Mortgage rate survey comes out. The survey is the most widely quoted source material for major media outlets. As such, headlines abound about the "highest mortgage rates in 7 years."  Of course, we've already discussed these 7 year highs earlier in the week when they actually occurred.  And I even pointed out that Freddie would almost certainly be following suit in yesterday's post.

But enough about me.  How about those rates?! 

Well, they're pretty high, but as far as individual days go, today saw the lowest amount of carnage compared to Tuesday and Wednesday.  The bad news is that reality is a bit worse than Freddie Mac's weekly numbers.  Instead of 4.625% (the nearest common mortgage rate to the Freddie survey), the most prevalent quote for top tier conventional 30yr fixed scenarios is actually 4.75%.  Not only that, but from a lender rate sheet standpoint, 4.75% is pricing out better than adjacent rates in terms of the amount of time it would take you to break even on the additional upfront cost required to move down to 4.625%.  

Bottom line: things are still bad, and you don't want to assume they'll get better if you have a loan in process or are trying to get one going.  That's not to say things CAN'T get better, but don't assume it will happen until you're seeing it and we're discussing it here.

Loan Originator Perspective

Rates hovered near unchanged today, which would be more gratifying if we weren't already at levels last seen in 2011.  Yes, I'm still locking early. -Ted Rood, Senior Originator

Would love to recommend floating as bonds have sold a lot over the last couple days.  However, you must remain defensive in this market.   My advice to clients is to lock in as soon as possible. -Victor Burek, Churchill Mortgage

Here we go. Rates are at a tipping point. Lock to avoid possible future losses. -Al Hensling

Today's Most Prevalent Rates

• 30YR FIXED - 4.75-4.875%
• FHA/VA - 4.5%
• 15 YEAR FIXED - 4.25%
  
• 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.