Mortgages Rates are back to their lowest levels since February. For an increasing number of lenders, current rates begin to shift the balance towards 3.875% as being the only Best-Execution Rate for Conventional 30yr Fixed Loans. Best-Ex is currently shared by 3.875% and 4.0%.
In many cases, the actual interest rate quoted by lenders will be the same today as it was last week, with the improvements seen in the form of lower closing costs (or increased lender credit toward closing costs as the case may be). That said, today's combinations of rate and payment is the best it's been since mid to late February for many lenders, though remains very close to rate sheets from April 10th.
The dominant theme in our commentary over the past few weeks was the equivocal movement of rates and markets ahead of the current week's events. We've seen very few weeks where interest rates have moved in such a narrow range for an entire week. Even without a big market mover on the horizon, that sort of behavior tends to suggest things will move in one direction or another.
But of course there is a big potential market mover on the horizon, and it's coming right up! On Wednesday, the Fed releases another periodic policy announcement ("FOMC Announcement" officially). While markets haven't been expecting any change in the Fed's lending rates for quite some time, these are the single most important economic events as far as the world of interest rates is concerned.
Market participants still aren't even remotely expecting a change in policy to be announced, but they will be listening closely to see if there's any evolution in "the way the Fed communicates existing policy." If market picks up hints that the Fed could be shifting in one direction or another (tighter vs. looser monetary policy), it can have a large, immediate effect on mortgage rates.
On the other hand, there are plenty of examples of FOMC Announcement days that have resulted in relatively unchanged mortgage rates the following day. The point is that FOMC Announcements--particularly those like this week's which is accompanied by a Bernanke Press Conference and FOMC Forecast updates--carry just about as much POTENTIAL to move markets as anything.
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).