Mortgage Rates continue to experience minor volatility near all-time lows, bouncing moderately LOWER today after moving HIGHER yesterday. Rates moved in a different direction every day this week! Today's moves didn't take rates to the lowest recent levels, but did slightly improve borrowing costs for the prevailing rates.
The Best-Execution Rate for Conventional 30yr Fixed Loans remains at 3.75%, but closing costs would be slightly lower for that rate today vs yesterday (or the amount of lender credit would be higher, depending on your scenario).
(Read More: What is A Best-Execution Mortgage Rate? )
After a relatively calm day yesterday (Get Caught Up With: Yesterday's Post), markets were nearly dead today, with a majority of trading motivation arriving early in the morning on European considerations. Volume and volatility have been dwindling ever since as the session ends early today ahead of the 3 day weekend in honor of Memorial Day. Banks and Markets are closed on Monday, so most lenders will not issue rate sheets or be accepting locks.
Next week starts out light, but finishes with the important Employment Situation Report. This is one of the few pieces of domestic economic data that we actually care about in light of how much Europe has been a driver of rates markets movements these days. Reason being: it's potentially informative for Fed policy, and with the Fed scheduled to make it's next policy announcement on June 20th, the employment numbers would certainly be a consideration as to whether or not the Fed makes any further hints or outright commitments at more quantitative easing. Even then, Europe continues to keep swings in rates muted on the occasions where we're waiting for the next big shoe to drop--in this case, Greek elections in late June (though we think things could easily come to a head before then).
Ongoing Guidance: We'd continue to advocate not trying to "get ahead" of current market movements as a high degree of uncertainty is pervasive. While it's a reasonably safe assumption that European concerns will generally help rates stay lower than they otherwise would be, that "otherwise would be" part is very much a moving target. Best bet is to focus on the fact that rates are at their all time lows, and with very close to their all-time low borrowing costs. Add in the fact that progress has always been increasingly difficult from current levels and risk vs reward for floating vs locking looks a bit larger than we'd like, but not out of the question for those who understand the risks and have an exit strategy if things don't go their way.
Loan Originator Perspective With Rates At All Time Lows
Constantine Floropoulos, Quontic Bank
Our position is the same, closing in 30 days or less you should lock. I think the easiest way to understand what's going on with the back and forth in the market as a consumer without all the technical data is as follows: Think of a seesaw, on one side you have mortgage rates/bond yield, on the other side you have stocks/riskier investments. The side with the mortgage rates is a small child, and the side with stocks is an obese adult. The point is, when the fat guy decides to put all his weight down, rates will fly through the roof, and it will happen quickly and aggressively. As of right now, the two on the seesaw are playing nice, back and forth and the fat guy is helping the child out.....at some point he won't be so nice.
Bon Van Gilder, Finance One
If you are on the fence or in crunch time on a purchase, you may want to lock today and have a worry free weekend. Thanks to those that served and have passed away. Semper Fi.
Jason York, Vice President of VA Operations at Prime Mortgage Lending, Inc
Pick your poison!! Either lock on a day we have rebounded, and don't look back, or continue to float, and hope things go your way! You'll stress too much trying to make sure you get at the super ultra pinnacle of the market.
Andy Pada, VP - 1st 2nd Mortgage Co.
There are so many variables to commitment. Should I lock or should I wait in this market is a question based on quicksand; an ever-shifting landscape that gives no one any foothold. My advice, stolen from the immortal Beyonce, is: "if you like it, put a ring on it."
Ted Rood, Senior Mortgage Consultant, Wintrust Mortgage
As expected, sedate action on equity and bond markets today. Have seen late Friday negative reprices many times lately, regardless of equities. Something to be aware of, if not anticipating, today.
Today's BEST-EXECUTION Rates
- 30YR FIXED - 3.75%
- FHA/VA -3.75%
- 15 YEAR FIXED - 3.125 edging down to 3.00%
- 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).