Mortgages Rates are higher today, following the FOMC Announcement, Member Forecasts and Press Conference. The actual text of the Fed's announcement and the actual levels of it's future forecasts did not cause the move higher in rates. Rather, weaker market levels in the morning combined with the fact that those FOMC-related events held the potential to cause volatility caused initial rate sheets this morning to be a bit weaker than they otherwise would have been due to market levels alone.
In other words, markets + fear of volatility surrounding FOMC = higher rates today. Although there was a ton of volatility today, it ended up being a well balanced fight, and didn't allow interest rates to run too far in one direction or another. The net effect is a Best-Execution Rate for 30yr Fixed Conventional loans that should be the same as yesterday's for most scenarios. The deterioration is more likely to be seen in the form of higher closing costs or lower lender credit depending on your scenario.
(read more about Best-Execution calculations).
Yesterday we said that the FOMC-related events could have a "large, immediate effect on mortgage rates, though we'd be careful to note that there are plenty of examples of FOMC Announcement days that have resulted in relatively unchanged mortgage rates the following day." Today was the latter--a "dud" if you will. This puts more focus on the economic data in the near future including this Friday's GDP and next Friday's even more important Employment Situation Report.
In one sense, it's always encouraging to see markets stay relatively stable in situations where they have historically been volatile. That can help ease concerns about low rates vanishing in an instant. But we're also faced with the reality that interest rates CONTINUE to have a hard time getting much lower from current levels.
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).