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Posted 06/07/2017

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Mortgage Rates Today, June 7, 2017, Plus Lock Recommendations

mortgage rates today

What's Driving Mortgage Rates Today?

Mortgage rates today are unlikely to change much. There are no economic releases today, and investors have been immobilized by the upcoming James Comey testimony (tomorrow).

Mortgage rates fell yesterday and have been moving up and down within a fairly tight range.

Changes in current mortgage rates are not likely to go our way. The data below indicates a rising rate environment, but only slightly.

Mortgage Rates Today

Program Rate APR* Change
Conventional 30 yr Fixed 3.625 3.625 Unchanged
Conventional 15 yr Fixed 3.000 3.000 Unchanged
Conventional 5 yr ARM 3.000 3.635 Unchanged
30 year fixed FHA 3.250 4.189 -0.01%
15 year fixed FHA 2.750 3.602 Unchanged
5 year ARM FHA 2.750 3.954 -0.01%
30 year fixed VA 3.375 3.509 -0.01%
15 year fixed VA 2.875 3.163 -0.01%
5 year ARM VA 3.000 3.264 -0.03%

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 up (bad for rates)
  • 10-year Treasury yield: up two basis points (2 100th of one percent) to 2.16 percent (bad for mortgage rates)
  • Oil prices rose from $47.17 a barrel to $47.69 (bad, because expensive energy fuels inflation)
  • Gold is down to $1,293.70 (bad, because gold normally falls when the economy is strengthening and investors are confident)
  • CNNMoney's Fear & Greed Index: Up 16 points to a neutral reading of 57! The number is bad for mortgage rates, and the direction of movement is not great 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 rise today. If I were in process with a mortgage, and could not withstand a rate increase, I would probably lock. . 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
  • LOCK 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)