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Posted 06/21/2017

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Mortgage Rates Today, June 21, 2017, Plus Lock Recommendations

mortgage rates today

What's Driving Mortgage Rates Today

The National Association of Realtors (NAR) reported that existing sales increased last month by an unexpected 1.1 percent. April's total was 5.57 million. Analysts had predicted a drop in sales for May, so the increase to 5.62 million transactions came as a surprise.

This is good for housing, but less good for mortgage rates. Demand for homes means demand for home loans, and increasing demand tends to push pricing higher. Luckily, this report isn't considered massively important on its own, so its effect won't be too harsh.

Mortgage Rates Today

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 3.125 3.678 Unchanged
30 year fixed FHA 3.250 4.205 -0.01%
15 year fixed FHA 2.750 3.673 Unchanged
5 year ARM FHA 3.000 4.075 +0.01%
30 year fixed VA 3.375 3.522 -0.02%
15 year fixed VA 3.000 3.304 Unchanged
5 year ARM VA 3.250 3.342 -0.01%

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

Today's Data

All major indicators are pointing to increasing mortgage rates today.

  • Stock markets: all three major indexes are up (bad for rates)
  • 10-year Treasury yield: up two basis points (2/100th of one percent) at 2.18 percent (slightly bad for rates)
  • Oil is currently at $43.67 a barrel, up a few cents from yesterday's pricing (slightly bad for rates)
  • Gold is unchanged at $1,244 an ounce (neutral -- gold rises when the economy falters and falls when inflation is an issue)
  • CNNMoney's Fear & Greed Index: Down five points to a neutral 46.  (That is good for rates. Even though the result is neutral, the direction of change is toward a more fearful state.)

This Week

This week brings several moderately important reports, and their results may change mortgage rates over the next few days. In general, reports that indicate the economy did better than expected drive rates up, and those that highlight economic softening push rates lower.

  • Thursday: Weekly jobless claims: An increase would be good for rates.
  • Thursday: leading Economic Indicators: This shows the direction in which the economy is heading. Up is bad for rates, and down is good.
  • Friday: New Home Sales: April's was 569,000 units. An increase would be bad for rates. A drop would be good.

Rate Lock Recommendation

Mortgage rates today continue to move up and down within a very narrow range. There is nothing this morning signalling any change from this.

I would probably lock if rates were in my strike zone and I was closing soon. However, your own goals and tolerance for risk may vary. this is only what I would do.

  • LOCK 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 (Jul 22nd, 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)