Click To See Today's Rates

Posted 09/07/2017

Google+
LinkedIn
Reddit

Mortgage rates today, September 7, plus lock recommendations

mortgage rates today

What's driving mortgage interest rates?

Mortgage rates today remained low after yesterday afternoon's release of the "Beige Book," a book of notes about the economy that the Federal Open Market Committee uses when deciding about rate increases.

Despite concerning weakness in the auto industry, the overall economy continued to grow at a “modest to moderate” pace, and with little sign of inflation. This is good for mortgage rates.

In addition, this morning's weekly unemployment numbers came in much higher than expected, with 298,000 new claims for benefits filed. Analysts had expected just 242,000.

Normally, the weekly report doesn't get people that excited, but this one came when there were no other reports and varied so much from expectations that it did push rates lower.

Click to see today's rates (Sep 23rd, 2017)

Mortgage rates today

(As of 10:30 am EDT)

Program Rate APR* Change
Conventional 30 yr Fixed 3.625 3.625 Unchanged
Conventional 15 yr Fixed 2.875 2.875 Unchanged
Conventional 5 yr ARM 3.125 3.666 Unchanged
30 year fixed FHA 3.250 4.180 Unchanged
15 year fixed FHA 2.750 3.632 +0.01%
5 year ARM FHA 3.000 4.099 Unchanged
30 year fixed VA 3.250 3.419 Unchanged
15 year fixed VA 2.875 3.175 +0.01%
5 year ARM VA 3.250 3.389 +0.01%

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

Today's data

Today's rates started low, but data points mostly to increasing rates.

  • Major stock indexes are all up (bad for mortgage rates)
  • Gold prices rose $2 an ounce to $1,347 (good for mortgage rates because gold rises when investors are nervous, and uneasy investors push rates lower)
  • Oil remained at $49 a barrel (neutral for rates)
  • The yield on ten-year Treasuries rose two basis points (2/100ths of one percent) to 2.09 percent (bad for rates, because mortgage rates tend to move in the same direction as Treasuries -- however, anything below 2.20 is low)
  • CNNMoney’s Fear & Greed Index rose four  points to a "Fearful" 43. This is not-great for rates, because the index is moving in a less fearful direction, and less-fearful investors turn away from bonds and mortgage-backed securities. That forces their prices down and rates up.

Mortgage rates today are still very favorable for home buyers. The climate is highly-encouraging for real estate purchases.

Tomorrow

The week was very light on data, and tomorrow is no exception. There are no pertinent reports scheduled for release on Friday. So gaze into your morning teacup, call your psychic hotline, or get up at 3:00 am to catch the latest Presidential tweet if you want clues about mortgage rates -- or just read this daily piece.

Rate lock recommendation

Mortgage rates are low this morning but data indicate that they could go higher today. As low as they are, I'd probably lock if I had a loan closing soon.

Here's the recommendation:

  • LOCK if closing in 7 days
  • LOCK if closing in 15 days
  • LOCK if closing in 30 days
  • LOCK if closing in 45 days
  • LOCK 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.

3 Testimonials

Michael J. Network Engineer

The Mortgage Reports is one of the most accurate, detailed, and informative sources of mortgage-related information on the internet.

Barry L.

I enjoy reading The Mortgage Reports. The articles are informative with lots of good stats and trends.

Thaddeus C. Systems Analyst

I am an aspiring homeowner and The Mortgage Reports helps me daily. Thank you for your excellent information.

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)