Friday, May 12, 2017

Rates Surge Lower After Downbeat Economic Data

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30 Year Fixed
4.09%   -0.08
15 Year Fixed
3.34%   -0.07
10YR Treasury
2.33%   -0.0670
FNMA 30YR 3.5
102.63   +0.42
FNMA 15YR 2.5
102.83   +0.31
Rates Surge Lower After Downbeat Economic Data
May 12, 2017

Most of the movement in mortgage rates had been slow, steady, and generally unfriendly in recent weeks.  Today was a stark exception as rates surged significantly lower (relative to their recent range) following weaker-than-expected economic data. Weak economic data tends to help rates move lower, and this morning's reports were the most important of the week (Retail Sales and Consumer Prices).

The reaction to the data was swift because investors were waiting to see if it would confirm fears about the direction of rates earlier in the week.  Not only did the data fail to confirm the fears, it suggested a completely contrary move.  In other words, rates were forced to make a quick course correction.  They ended up moving right back in line with last Friday's levels for most lenders.  The entire week of anxiety was erased in a few short hours, with the average lender nearly an eighth of a percentage point lower on a conventional 30yr fixed quote.

Loan Originator Perspective

If you floated overnight, you should be rewarded today.   Bonds are rallying nicely, but since it is a Friday, I think lenders will be reluctant to pass along all the gains.  If you want to lock today, best strategy is to wait until as late as possibly as several lenders have already improved pricing from this morning’s initial rate sheets.  I would favor floating over the weekend and evaluate pricing Monday morning. Victor Burek, Churchill Mortgage

The bounce at 2.42 came together as expected.  We're not seeing a huge improvement to rate sheets yet mostly because it's Friday.  I'd recommend floating anything until Monday and we will reassess then.   -Jason Anker - Sr. Loan Officer 

Today's Best-Execution Rates

  • 30YR FIXED - 4.125%
  • FHA/VA - 3.75 - 4.0%
  • 15 YEAR FIXED - 3.375%-3.5%
  • 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.

30 Year Fixed Rate Mortgage
15 Year Fixed Rate Mortgage
Co-branded Daily Rate Report for:
Bruce Weaver
Realtor, GRI
RE/MAX Southern Homes
License:  Real Estate License #53217 ...
Realtor since 1994, GRI-(Graduate Realtor Institute) Married, 2 Adult Sons, 1 Grandson, Enjoys Hiking, Motorcycles, Camping, Fishing, Crafts, Construction, Home Repairs, Technology, and Real Estate.
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Today's Rates
Best Execution
Rate Change
30 Yr FRM 4.09% -0.08
15 Yr FRM 3.34% -0.07
FHA 30 Year Fixed 3.85% -0.05
Jumbo 30 Year Fixed 4.36% -0.05
5/1 Yr ARM 3.07% -0.02
Average Mortgage Rates
Rate Points Change
15 Yr. Fixed 3.06% 1.30 +0.03
30 Yr. Fixed 3.76% 1.38 +0.03
MBA **
30 Yr. Fixed 4.41% 0.38 +0.13
15 Yr. Fixed 3.64% 0.34 +0.12
30 Yr. Jumbo 4.36% 0.26 +0.07
30 Yr. FHA 4.15% 0.29 +0.13
5/1 ARM 3.45% 0.26 +0.17
Freddie Mac **
30 Yr. Fixed 4.05% 0.50 +0.03
15 Yr. Fixed 3.29% 0.50 +0.02
1 Yr. ARM 2.68% 0.20 +0.01
5/1 Yr. ARM 3.14% 0.50 +0.01
* FHFA averages are updated monthly.
** Mortgage Bankers Association (each Wednesday) and Freddie Mac (each Thursday) averages are updated weekly.
Secondary Markets
Price Change
30YR FNMA 3.0 99.63 +0.52
30YR FNMA 3.5 102.63 +0.42
30YR GNMA 3.0 101.28 +0.38
30YR GNMA 3.5 103.88 +0.31
15YR FNMA 3.0 102.83 +0.31
15YR FNMA 2.5 100.52 +0.34
Yield Change
2 YR 1.2904% -0.0484
5 YR 1.8451% -0.0746
10 YR 2.3257% -0.0670
30 YR 2.9857% -0.0446
Prices as of: 5/12/2017 5:06PM EST
MBS and Treasury data provided by Thomson Reuters.
Mortgage News Daily and MBS Live! are exclusive re-distributors of Real Time Thomson Reuters Mortgage Information.
Secondary Marketing Managers:
If you are interested in gaining access to the most accurate real-time back-month TBA indications from Thomson Reuters and Tradeweb. Request More Information
About This Report
Mortgage News Daily is a trusted source of mortgage rate market data and analysis, with over 1 million readers each month. Unlike many rate surveys, our survey is conducted on a daily basis and is designed to bring you the most current and accurate rate data available.  We use a proprietary formula to calculate averages based on best-execution rates from top lender's rate sheets, also taking into account feedback from hundreds of mortgage market professionals around the country.
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