Mortgages Rates improved slightly today, but that slight improvement brings them close to the best levels of the week. This also means rates continue to operate fairly close to all-time lows. We've recently noted a greater-than-normal degree of stratification between lender offerings, but that reversed somewhat today. That means you're more likely to see comparable rate and fee structures offered by different lenders, though some stratification remains.
30yr Fixed Conventional Best-Execution remains at 4.0% for most scenarios with 3.875% available for some scenarios at the more aggressively priced lenders,
(read more about Best-Execution calculations).
We spoke yesterday about the recent indecisive attitude in bond markets. Keep in mind that mortgage rates are, in large part, a function of bond market movement as the Mortgage-Backed-Securities (MBS) that most directly affect rates are one of the bond market's biggest constituents. Both Treasuries and MBS have recently been confined to short term ranges this week after experiencing some extreme volatility in the three weeks prior. Here's what we said yesterday:
"Markets can only go sideways for so long. If that doesn't change tomorrow, it would likely change next week. That "change" will be determined, in part, by lines in the sand for underlying markets. We observe that they've recently been sideways due to the fact that neither the happy line or the scary line have been crossed, but be aware that we're right up against the scary line. We'd probably be more comfortable with strategic floating if that were not the case, especially heading into a notoriously volatile day of the week."
Thankfully, bond markets did not cross those "scary lines" today, but this can be positive or negative depending on your outlook. For folks who are planning on refinancing, waiting for some reason, or otherwise unable to lock at the moment, it means that historically low rates are still available and have been holding steady. For those who are needing or wanting to see just a little more improvement in rates before pulling the trigger, it unfortunately means the same thing.
We're generally viewing next week as relatively inconsequential in the big picture given that the following week includes the next FOMC Announcement (you know... where the Fed puts out their official statement every month and a half or so...). We could certainly see some level of improvement or deterioration in mortgage rates, but there's greater potential for bigger moves in the following week. Keep in mind that "less volatile" and "less consequential" don't connote an absence of risk. Unexpected market-moving headlines can happen any time.
Today's BEST-EXECUTION Rates
- 30YR FIXED - 3.875%-4.0%
- FHA/VA -3.75%
- 15 YEAR FIXED - 3.125-3.25%
- 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've recently spent time further away from the very best levels of the past few months having broken away from a long, stable trend.
- That led us to expect greater volatility, and indeed we got it!
- But now that volatility MIGHT be depositing us back at the edge of the old, stable range. Whether it lets us back in or not, is another story.
- Rates could easily move higher or lower, but given the nearness to all time lows, there's generally 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).