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Posted 06/06/2017

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Mortgage Rates Today, June 6, 2017, Plus Lock Recommendations

mortgage rates today

What's Driving Mortgage Rates Today?

This week is extremely light on economic reporting. Mortgage rates today are primarily determined by global events like attacks n Europe, tweets in the US, and today's data (see below). Per Federal Reserve policy, Fed speakers are refraining from comment for the next week-and-a-half before it releases its announcement.

In addition, many American investors are frozen as we all await the results of former FBI Director James Comey's congressional testimony on Thursday. Unless something crazy happens, expect mortgage rates to move within a fairly narrow range.

Mortgage Rates Today

Program Rate APR* Change
Conventional 30 yr Fixed 3.625 3.625 -0.13%
Conventional 15 yr Fixed 3.000 3.000 Unchanged
Conventional 5 yr ARM 3.000 3.635 +0.01%
30 year fixed FHA 3.250 4.200 +0.01%
15 year fixed FHA 2.750 3.602 Unchanged
5 year ARM FHA 2.750 3.964 +0.04%
30 year fixed VA 3.375 3.515 Unchanged
15 year fixed VA 2.875 3.171 -0.01%
5 year ARM VA 3.125 3.292 +0.06%

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

Today's Data

The US economy this morning points to falling interest rates.

  • Stock markets: all three major indexes are down (good for rates)
  • 10-year Treasury yield: down four basis points to 2.14 percent (a significant move and good for mortgage rates)
  • Oil fell again to $47.17 a barrel (good because cheaper energy keeps inflation away)
  • Gold is up again, to $1,295.90 (good, because gold normally falls when the economy is strengthening and investors are confident)
  • CNNMoney's Fear & Greed Index: Down 16 points to a fearful reading of 41! The number is good for mortgage rates, and the direction of movement is encouraging to anyone floating a home loan rate.

This Week

Thursday: Weekly Unemployment claims -- how many people filed new claims for benefits. The report shows strength and weakness in the jobs market, which is very important, but it's only a weekly report, so it gets little attention unless the actual number of claims deviates crazily from estimates.

This week, analysts expect 238,000 claims.

Rate Lock Recommendation

All indicators this morning show that rates could drop today. If I were in process with a mortgage, I'd be tempted to float and see if I could do better. However, everyone's needs and tolerance for risk are different. If you are risk-averse and can secure a satisfactory rate this morning, you might want to grab it.

  • 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 (Sep 23rd, 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)