Mortgage Rates Mixed Today

Mortgage rates were just mixed today, as they are now roughly in the center of a range that's persisted since mid-November.  Rates had been trending higher since hitting all-time lows in early July, and exploded higher following the presidential election.

Some investors are increasingly worried/convinced that the decades-long trend toward lower rates has been permanently reversed, but such a conclusion would require YEARS to truly confirm.  With the incoming administration's policies driving a large portion of upward rate momentum, mortgage rates will be hard-pressed to return to pre-election levels until well after Trump takes office.  Rates can move for other reasons, but it would take something big and unexpected for rates to get back to pre-election levels.

What we really need is to see a sustained push back toward lower rates (something that lasts more than 3 days) before anything less than a cautious, lock-biased approach makes sense for all but the most risk-tolerant borrowers.  The outright numbers are less important here.  They can vary quite a bit based on multiple variables.  The fact that rates have been sideways for so long is more relevant.  In fact, rates haven't merely been sideways.  The range has been growing progressively more narrow over the past several months.

In summary, while this type of "consolidation" is common in the wake of big market movement, it does mean that rates will soon be forced to choose a direction.  Such breakouts tend to see extra momentum.  In other words, we're increasingly due for a bigger move.  If you roll the dice on that move being toward lower rates, there's additional reward for that risk.  For most borrowers, however, that potential for reward is overshadowed by the increased risk of a big move toward higher rates.