After managing to improve on Thursday and Friday,mortgage rates begin the current week slightly higher. Even so, the changes between Friday and today are minimal in most cases and several lenders are actually unchanged or slightly lower in rate/fee. This leaves the prevailing Best-Execution rate for 30yr fixed, conventional loans at 3.25%.
(Read More:What is A Best-Execution Mortgage Rate?)
Last week saw rather muted activity in financial markets and fairly minimal movements in mortgage rates. There wasn't much on the calendar in terms of data or events and markets generally coasted sideways after spending a few days reacting to the previous week's jobs report. On the approach, this week contains much more in terms of potential market movers, but the question remains: will they actually motivate movement?
So far, the answer is "no" considering the reaction to this morning's Retail Sales data. Markets paid some small attention to the stronger-than-expected numbers, but it certainly didn't generate big movement or big volume. This would seem to suggest that it's a tall order for the rest of the week's data to send rates definitively in either direction, and the lack of guidance leaves the door open for volatility. It's also possible that markets are waiting to see if any major news comes out of Thursday's EU Summit.
Long Term Guidance: While the recently high degree of uncertainty remains very much intact, the Fed's decision to specifically target Mortgage-Backed-Securities in a third round of Quantitative easing provides a supportive undertone for mortgage rates. We'd still advocate not trying to get too far ahead markets. In other words, we wouldn't try to guess how low or how high rates might go before changing course. Rates remain near all time lows and risks of volatility remain high. Those factors suggest that you stay vigilant regarding the day-to-day swings in mortgage rates. If you're floating, set a limit as to how high rates would have to go before you cut your losses and locked. Similarly, set a target of how low rates would have to get before you lock.
Loan Originator Perspectives
"It's a very busy week for economic data, and rates will be volatile. So
it's worth restating something I mentioned last week: rates move in real
time throughout each MBS trading day, so rates you read about in the
media are expired by the time you're reading about them. When it’s
volatile like this, rate shoppers need to have target rates that they
can’t or won’t go above, and give lenders standing orders to lock those
rates when they become available. " -Julian Hebron, Branch Manager, Loan Agent, RPM Mortgage
Today's Best-Execution Rates
- 30YR FIXED - 3.25% - 3.375%
- FHA/VA - 3.25% (varies more between lenders than conventional 30yr Fixed)
- 15 YEAR FIXED - 2.75%
- 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
- Rates could easily move higher or lower, but given the nearness to all time lows, there's generally more risk than reward regarding floating
- This 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).