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Posted 05/22/2017

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Mortgage Rates Today, May 22, 2017, Plus Lock Recommendations

mortgage rates today

What's Driving Mortgage Rates Today?

As usual for a Monday, there are no economic releases today. Markets are more likely to be driven by White House drama and Twitter wars than any financial reporting. You'll want to look at the data posted below the rate table to see other indicators.

Keep in mind also that Friday mortgage pricing tends to be a little more conservative (higher) than Monday pricing. That's to protect lenders from rate-changing events over the weekend, when they are closed. (These events are called "tape bombs," after the old ticker tape they used to generate stock data.)

Click to see today's rates (Jul 20th, 2017)

Today's Mortgage Rates

Program Rate APR* Change
Conventional 30 yr Fixed 3.750 3.750 Unchanged
Conventional 15 yr Fixed 3.125 3.125 Unchanged
Conventional 5 yr ARM 3.000 3.661 Unchanged
30 year fixed FHA 3.250 4.227 Unchanged
15 year fixed FHA 2.750 3.645 +0.01%
5 year ARM FHA 2.875 3.996 Unchanged
30 year fixed VA 3.375 3.536 Unchanged
15 year fixed VA 2.875 3.181 Unchanged
5 year ARM VA 3.250 3.308 Unchanged

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

 Today's Data

  • All three stock markets: all three major indexes up slightly (slightly bad for rates)
  • 10-year Treasury yield: down one basis point to 2.24 percent percent (slightly good for rates)
  • Oil is up over$51: (bad, because when you have increased demand for a finite resource, its prices go up and that can trigger inflation worries)
  • Gold slightly up (not normally associated with positive economic news -- good for rates because it indicates lack of confidence in the economy.)
  • Fear & Greed: 47 (slightly fearful, good because less confident investors tend to shun stocks and choose bonds and mortgage-backed securities)

This Week

  • Tuesday: April New Home Sales report. Forecast is 610,000 sales. More is worse for rates, fewer is better.
  • Wednesday: April Existing Home Sales report. Forecast is 5.6 million sales. More is worse for rates, fewer is better.
  • Wednesday: Minutes from Fed meeting. Investors watch closely for indications of future rate increases.
  • Thursday: Weekly Unemployment Claims: Estimated 235,000. More is better for rates, but data is only weekly so less important.
  • Friday: Durable goods orders for April: Estimated to drop one percent. Larger drop would be good for rates, increase would be bad. This report is fairly important.
  • Friday: Consumer Sentiment for May: Expected reading is very high at 97.7. Anything lower would be good for rates.

Rate Lock Recommendation

I expect mortgage rates to perhaps rise slightly later today, and would lock if I had a loan closing soon. Your own risk tolerance and goals may vary.

  • LOCK if closing in 7 days
  • LOCK if closing in 15 days
  • FLOAT if closing in 30 days
  • FLOAT if closing in 45 days
  • FLOAT if closing in 60 days

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 (Jul 20th, 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)