Mortgage Rates were roughly unchanged today, essentially fighting broader bond market weakness in order to remain in all-time low territory. With an early close for markets today and the Independence Day holiday tomorrow, it wouldn't have been abnormal for lenders to be a bit more conservative in terms of pricing. Indeed some lenders were weaker today, but only slightly. On average, things remained right where they were yesterday with 30yr Fixed Best-Execution firmly into 3.625% territory and some lenders in 3.5% territory.
(Read More:What is A Best-Execution Mortgage Rate?)
Because of the holiday, lenders won't be generating rate sheets again until Thursday morning. By the time they do, markets could be decidedly different owing to a significant amount of economic data and events occurring before the time of day that most lenders put out their first rate sheet. Granted, Friday remains the biggest deal with the extremely important Employment Situation Report standing alone as the most important piece of economic data released each month, and the only report of the day.
But we could see a sort of "lead off" in one direction or another if Thursday morning's data suggests it. If Friday's jobs data were to corroborate that move, then things could easily be very different by the time we see Friday's first rate sheets. Given that we're at all time lows today, it seems like a fairly big risk to take, but we'd also note that the default expectation for rates is "low and steady" until/unless they do something to break that trend.
Long Term Guidance: We'd continue to advocate against trying to "get ahead" of current market movements due to the high degree of uncertainty. 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 can change quickly based on events that aren't "scheduled" or able to be forecast. 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 Perspectives
Ted Rood, Senior Mortgage Consultant, Wintrust Mortgage
Friday is the big data day with non farms payroll report. That being said, this market seems semi-immune to domestic economic data these days due to ongoing EU issues. Would take a remarkable jobs report to swing pricing substantially, less inclined to worry about it than most previous months.
Bob Van Gilder, Finance One Mortgage
Put some burgers on the BBQ and enjoy your family and friends for this 4th of July! Rates remain sizzling. How would you like yours? Lock it if it's what you waited for...float if you have the stomach for it.
Victor Burek at Benchmark Mortgage
I feel rates are going to continue to move sideways to lower for the foreseeable future. I see no reason to lock any loan that isnt within 15 days of closing. Have a safe 4th of July.
Ira Selwin, Vice President of Secondary Marketing
Don't let your rate blow up before the 4th of July. Lock your rate if the rate you need is available. Though it seems rates may be invincible, you don't want to be on the wrong side of things if that's not the case.
Matt Hodges, Loan Officer, Presidential Mortgage Group
Locking any purchases inside 45 days and refinances certainly if they are approved and appraisal is back. I don't know that Friday's NFP and unemployment numbers help us at all. They may hurt if they are in line or stronger than expected. Don't get greedy. Lock it down!
Today's BEST-EXECUTION Rates
- 30YR FIXED - 3.625%
- FHA/VA -3.5% - 3.75%
- 15 YEAR FIXED - 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).