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Posted 06/08/2017

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Mortgage Rates Today, June 8, 2017, Plus Lock Recommendations

mortgage rates today

What's Driving Mortgage Rates Today

Mortgage rates have been moving up and down within a fairly tight range up until today. Today brings on the Comey testimony, and during the first 20 minutes, rates have climbed.

We got the weekly unemployment numbers today, and this report was good for mortgage rates.

There were 245,000 new claims for benefits last week, when analysts had been expecting 238,000. Higher-than-expected unemployment points to economic softening, which is good for interest rates.

However, this report only covers a week of data. It is not nearly as influential as the monthly report.

Mortgage Rates Today

Program Rate APR* Change
Conventional 30 yr Fixed 3.750 3.750 +0.13%
Conventional 15 yr Fixed 3.000 3.000 Unchanged
Conventional 5 yr ARM 3.000 3.635 Unchanged
30 year fixed FHA 3.250 4.186 Unchanged
15 year fixed FHA 2.750 3.607 +0.01%
5 year ARM FHA 2.750 3.966 +0.01%
30 year fixed VA 3.375 3.505 Unchanged
15 year fixed VA 2.875 3.181 +0.02%
5 year ARM VA 3.125 3.294 +0.03%

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

Today's Data

Most indicators point to increasing mortgage rates.

  • Stock markets: all three major indexes are up (bad for rates)
  • 10-year Treasury yield: up three basis points (3 100ths of one percent) to 2.21 percent (bad for mortgage rates)
  • Oil is currently at $45.74 a barrel. This is an increase over last night's closing price (bad, because expensive energy fuels inflation)
  • Gold is down to $1,277.10 (bad, because gold normally falls when the economy is strengthening and investors are confident)
  • CNNMoney's Fear & Greed Index: Down two points to a neutral 55.  (That is good for rates. Even though the result is neutral, the direction of change is toward a more fearful state.)

This Week

There are no more economic releases scheduled this week.

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 (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)