With the new week comes new pain for Mortgages Rates, which rose to their highest levels of the year today. Lenders have been adjusting their rate sheets all day and by varying degrees, so there's greater than normal degree of variation between them. For the most part, the 30yr Fixed Conventional Best-Execution Rate remains in the same 4.0% - 4.125% range, but for most lenders, borrowing costs at those rates are higher.
(read more about Best-Execution calculations).
(read more about Wednesday's Big Changes in Rates).
Friday's analysis bears repeating:
This leaves us in a situation where Best-Execution rates are in territory not seen for several months. At current levels, rates could notch an eighth or two higher before encountering their first significant supportive ceiling. So although holding steady for two days is a relief after Wednesday's big losses, don't let it affect your decision making process (assuming you're faced with a decision regarding locking or floating). Understand that rates could just as easily move higher tomorrow as they could hold steady or improve.
Because today was essentially flat in terms of rate movement, we would need to see how Monday turns out before we could begin to entertain a higher-than-random chance that mortgage rates will dig in for support at current levels and possibly rally lower. The past two days have been promising, but not conclusively so, and more likely than not, are merely the beginning of a period of greater volatility for rates. Some of that volatility might work in our favor, but for now, we expect the swings to be bigger and the windows of opportunity to be smaller.
Monday, of course, is "today" in the excerpt above and it turned out poorly. If you're in a position where you were considering locking early last week and have only moved up .125% in your quoted interest rate, that seems like a good opportunity.
Are rates on a one-way trip higher? Despite the ugliness of the past few sessions, we still can't be sure about that. Underlying bond markets are approaching some levels that many market participants are looking to for support. Today's weakness brings us close enough to that support that we might start seeing some of it's positive effects over the next few days. That said, if you have any sort of pressing need to refinance, that's not the sort of thing that it makes sense to plan on. We continue to expect things to be volatile.
Today's BEST-EXECUTION Rates
- 30YR FIXED - 4.0% at best. Some 4.125%
- FHA/VA -3.75%
- 15 YEAR FIXED - 3.375%
- 5 YEAR ARMS - 2.625-3.25% depending on the lender
Ongoing Lock/Float Considerations
- Rates and costs continue to operate near all time best levels
- We're currently further away from the very best levels than we have been in recent months
- We've broken away from a long, stable trend and are expecting greater volatility
- Rates could easily move higher or lower, but given the above facts, there seems to be more risk than reward regarding floating
- (As always, please keep in mind that our talk of Best-Execution always pertains to a completely ideal scenario. There can be all sorts of reasons that your quoted rate would not be the same as our average rates, and in those cases, assuming you're following along on a day to day basis, simply use the Best-Ex levels we quote as a baseline to track potential movement in your quoted rate).