Mortgage rates today opened lower, probably because of the uncertainty created by yesterday'sÂ North Korea threat.
The thing with interest rates is that they tend to go lower in times of economic uncertainty or weakness. That's because investors want a "safe haven" like bonds for their money until the crisis blows over. Demand for bonds pushes their prices up, which makes rates fall (see below).Click to see today's rates (Aug 19th, 2017)
(As of 10:30 am EDT)
|Conventional 30 yr Fixed||3.750||3.750||Unchanged|
|Conventional 15 yr Fixed||3.000||3.000||Unchanged|
|Conventional 5 yr ARM||3.125||3.678||-0.04%|
|30 year fixed FHA||3.250||4.214||-0.01%|
|15 year fixed FHA||2.750||3.688||Unchanged|
|5 year ARM FHA||2.875||4.058||-0.04%|
|30 year fixed VA||3.375||3.535||-0.1%|
|15 year fixed VA||3.000||3.293||-0.01%|
|5 year ARM VA||3.250||3.400||Unchanged|
Today's economic data are mixed, mostly pointing to lowerÂ rates today. But interest rates are still bumping up and down within a narrow range.
Today is leaning toward rate decreases, but once the Korean threat dissipates, rates may bump back up.
This week is very light on economic releases that pertain to interest rates.Â Tomorrow's news is the first pertinent release of the week.
Signs point to neutral-to-decreasing rates. You may be able to get away with floating, but I'm not sure there is much of an upside to doing so. IfÂ your lender offers you a good rate, locking it in may be smarter than holding out.
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 payingÂ five percent interest ($50) each year. (This is called its â€ścoupon rate.") Thatâ€™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.
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.
TheÂ buyer gets an interest rate, or yield, of only 4.2 percent. And thatâ€™s why, when demand for bonds increases and bond prices go up, interest rates go down.
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 gettingÂ $700. The buyer gets the same $50 a year in interest, but the yield looks like this:
The buyerâ€™s interest rate is now slightly more than seven percent.Click to see today's rates (Aug 19th, 2017)
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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)