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Posted 04/10/2017

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Mortgage Rates Today, April 10, 2017, Plus Lock Recommendations

What's Driving Mortgage Rates Today?

Mortgage rates today won't be influenced by any major financial reporting. However, at 4:00 PM EDT, Fed Chair Janet Yellen will speak.

If she drops any bombshells (unlikely; this Fed doesn't seem to relish springing surprises on market participants), lenders could alter rates this afternoon.

Click to see today's rates (Apr 24th, 2017)

Today's Indicators

Current mortgage rates would be a little higher, because all other indicators are positive and / or inflationary.

  • All three major American stock indexes are up -- bad for rates
  • Oil prices are higher -- bad for rates
  • Ten-year Treasury yields are flat
  • Gold is slightly down -- gold rises when the economy is shaky, so falling gold is bad for rates
  • CNNMoney's Fear & Greed Index, which measures investor sentiment, is in "Fear" at 42. That's less fearfull than the previous reading of 40, though, so that's not good for rates either.

Mortgage Rates Today

Today's Mortgage Rates

* FHA APRs include government-mandated mortgage insurance premiums (MIP). See our assumptions.

These rates are averages, and your rate could be lower.

Tomorrow

This entire week will be very light on data. Take your cues from stocks and current events, and stay in touch with your lender. I expect current mortgage rates to move up and down all week within a fairly narrow range.

Rate Lock Recommendation

This is a good time to take advantage of the drop in pricing. I recommend locking for anyone closing in the next 30 days.

;lock 30

Note that this is what I would do if I had a mortgage in process today. Your own goals and tolerance for risk may differ. 

Click to see today's rates (Apr 24th, 2017)

What Causes Rates To Rise And Fall?

Mortgage interest rates depend on a great deal on the expectations of investors. Good economic news tends to be bad for interest rates, because an active economy raises concerns about inflation. Inflation causes fixed-income investments like bonds to lose value, and that causes their yields (another way of saying interest rates) to increase.

For example, suppose that two years ago, you bought a $1,000 bond paying five percent interest ($50) each year. (This is called its “coupon rate.") That’s a pretty good rate today, so lots of investors want to buy it from you. You sell your $1,000 bond for $1,200.

When Rates Fall

The buyer gets the same $50 a year in interest that you were getting. However, because he paid more for the bond, his interest rate is not five percent.

  • Your interest rate: $50 annual interest / $1,000 = 5.0%
  • Your buyer’s interest rate: $50 annual interest / $1,200 = 4.2%

The buyer gets an interest rate, or yield, of only 4.2 percent. And that’s why, when demand for bonds increases and bond prices go up, interest rates go down.

When Rates Rise

However, when the economy heats up, the potential for inflation makes bonds less appealing. With fewer people wanting to buy bonds, their prices decrease, and then interest rates go up.

Imagine that you have your $1,000 bond, but you can't sell it for $1,000, because unemployment has dropped and stock prices are soaring. You end up getting $700. The buyer gets the same $50 a year in interest, but the yield looks like this:

  • $50 annual interest / $700 = 7.1% The buyer’s interest rate is now slightly more than seven percent.
Click to see today's rates (Apr 24th, 2017)

The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.

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2017 Conforming, FHA, & VA Loan Limits

Mortgage loan limits for every U.S. county, as published by Fannie Mae & Freddie Mac, the Federal Housing Administration (FHA), and the Department of Veterans Affairs (VA)