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Posted 06/16/2017

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Mortgage Rates Today, June 16, 2017, Plus Lock Recommendations

mortgage rates today

What's Driving Mortgage Rates Today

Mortgage rates opened higher this morning as bond markets gave back the gains they made yesterday. They are still operating within a narrow range. In addition, lenders tend to price conservatively on Fridays to protect themselves in case something earthshaking happens over the weekend that would cause them to lose money.

The Commerce Department reported that May's Housing Starts, a reports that tracks groundbreakings of new home projects, was disappointing enough to cause builder stocks prices to crater. Analysts predicted an increase to 1.215 million houses but got just 1.092.

This slowing of the building sector is good for mortgage rates. Less demand for home loans tends to push rates lower.

June's preliminary reading to the University of Michigan's Index of Consumer Sentiment measures consumer willingness to spend. It's one of the more important reports. Experts expected a reading of 97.3, up from from May's 97.1. They got a surprising drop to 94.5. That's a big deal because consumer spending drives two-thirds of our economy, and if consumers don't feel confident, they keep their wallets shut.

This is good for mortgage rates, because less spending equals less inflation.

Mortgage Rates Today

Program Rate APR* Change
Conventional 30 yr Fixed 3.750 3.750 +0.13%
Conventional 15 yr Fixed 3.125 3.125 +0.13%
Conventional 5 yr ARM 3.000 3.635 Unchanged
30 year fixed FHA 3.250 4.205 +0.01%
15 year fixed FHA 2.750 3.679 Unchanged
5 year ARM FHA 2.875 4.018 Unchanged
30 year fixed VA 3.375 3.538 +0.03%
15 year fixed VA 2.875 3.181 Unchanged
5 year ARM VA 3.250 3.345 Unchanged

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

Today's Data

Indicators are mixed, and should mostly cancel each other out. Rates may not change much today, unless global political or economic events or random White House tweets cause them to move.

  • Stock markets: major indexes are down (good for rates)
  • 10-year Treasury yield: unchanged at 2.16 percent (neutral)
  • Oil is currently at $44.73 a barrel, up a few cents from yesterday's pricing (neutral because it's only a small increase)
  • Gold is up slightly from$1,255.50. to $1,256.40 (neutral, because the increase is small)
  • CNNMoney's Fear & Greed Index: Down two points to a neutral 50.  (That is slightly good for rates. Even though the result is neutral, the direction of change is toward a more fearful state.)

Monday

There are no scheduled economic reports set for release on Monday. Check this blog on Monday for the entire weekly schedule of reports, and how they can affect interest rates.

Rate Lock Recommendation

Mortgage rates today are likely to bump around within a narrow range, unless some bombshell drops later. I would probably wait until Monday to see if things are going to settle in at a lower rate. However, your own goals and tolerance for risk may vary. this is only what I would do.

  • FLOAT if closing in 7 days
  • FLOAT 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 (Jun 28th, 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)