Mortgages Rates are microscopically higher today, but there is little effect on Best-Execution rates and only minor affects on the closing costs associated with those rates. In other words, the actual interest rate for any given scenario should be the same today as it was yesterday, although the origination cost would be slightly higher (or lender credit toward closing costs slightly lower depending on your scenario).
When we compute the average Best-Execution rate offerings each day, we're left with a number that doesn't line up with an actual interest rate that you'd be likely to see on a GFE. In the case of recent weeks, this has been between 3.92 and 3.96, which stands to reason considering the prevalent Best-Execution rates are 3.875% and 4.0%.
It's interesting to consider that this computed range of 3.92-3.96 has been intact since the disappointing Employment Situation Report on 4/6 helped us break below 4.0 in conjunction with the fact that we've been sort of moaning and groaning about how narrow and boring that range has been, only to have it land right on 3.94% to close the week. The market has spoken (over the last two weeks anyway), and it says: SIDEWAYS!
As such, the parting thoughts will be same as they have been all week: We continue to look toward next week's FOMC Announcement on Wednesday as a high-risk event, but would note for the risk-takers in the audience, that "risk" doesn't necessarily have a negative connotation. We don't know if next week makes rates go higher or lower.
We do know that there's more potential for their movement to be much greater than this week. The safest rationale combines that truth with the fact that rates have indeed had a hard time getting much lower from current levels. It COULD happen, but even if it does, those who locked "too early" would likely not miss out on as difference in monthly payment as those who locked "too late."
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
- Current levels have experienced increasing resistance in improving much from here
- Rates could easily move higher or lower, but given the nearness to all time lows, there's generally more risk than reward regarding floating
- But that will always be the case when rates operate near all-time levels, and as 2011 showed us, it doesn't always mean they're done improving.
- (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).