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Posted 05/15/2017

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Mortgage Rates Today, May 15, 2017, Plus Lock Recommendations

mortgage rates today

What's Driving Mortgage Rates Today?

Typically on Mondays, there are no economic releases, no mortgage data to peruse before making your lock / float decision.

Click to see today's rates (May 26th, 2017)

But there are always numbers. If the stocks are up, generally mortgage rates get an upward push. Oil prices, when they rise, indicate possible shortages of the valuable resources, and that fuels concerns about inflation -- pushing rates higher.

Gold prices, on the other hand, tend to rise when market participants are worried about the economy. Increasing gold prices can predict falling mortgage rates. because when people lose confident in the economy, they move their money into bonds, mortgage-backed securities and gold.

Finally, there is investor confidence. CNNMoney's Fear & Greed Index measures how investors feel about markets right now. When the index moves in a greedy direction, rates tend to rise, and when it moves into a fearful level, rates tend to fall.

Mortgage Rates Today

Program Rate APR* Change
Conventional 30 yr Fixed 3.875 3.875 Unchanged
Conventional 15 yr Fixed 3.250 3.250 Unchanged
Conventional 5 yr ARM 3.125 3.717 Unchanged
30 year fixed FHA 3.375 4.324 Unchanged
15 year fixed FHA 2.750 3.688 Unchanged
5 year ARM FHA 2.875 4.003 Unchanged
30 year fixed VA 3.500 3.669 Unchanged
15 year fixed VA 3.000 3.307 -0.08%
5 year ARM VA 3.250 3.333 -0.01%

Your rate might be different. Click here for a personalized rate quote. See our rate assumptions here.

Today's Data

  • All three stock markets: up (bad)
  • 10-year Treasury yield: unchanged at 2.34 (neutral)
  • Oil is up, barely below $50: (bad)
  • Gold up slightly" (slightly good)
  • Fear & Greed: 64, up two points (greedier, which is bad)

With such  mixed bag of indicators, it's unlikely that rates will move much either way today, absent any earthshaking news or exceptionally bizarre tweets.

This Week

There are several events this week that can affect mortgage rates.

  • Tuesday: Housing Starts, expected to be 1.256 million. More is worse for rates, fewer is better.
  • Tuesday: Industrial production, expecting a .5 percent increase.
  • Thursday: Weekly unemployment, expected to be 240,000 new claims.

Rate Lock Recommendation

I don't expect rates to move that much this week. If you can grab something you like, especially with no extra charges, go for it.

rate lock recommendation

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 (May 26th, 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)