rates started out the day mixed but mostly lower as lenders passed along market improvements from late in yesterday's session. Mid-morning headlines about a potential ceasefire in the Middle East along with news that Eurozone finance ministers were making progress on releasing bailout funds to Greece both served to send interest rates higher in financial markets. The market volatility ultimately prompted several lenders to release negatively revised rate sheets, making for a net increase in rates/costs on the day, but one that doesn't alter the prevailing 3.375% Best-Execution level for 30yr Fixed, Conventional Loans.
More:What is A Best-Execution Mortgage Rate?)
Although markets haven't been keen to respond much to the limited amount of economic data so far this week, tomorrow offers the busiest line-up so far. Despite the reasonably flat interest rate situation over the past several weeks, there's plenty of room for volatile movements inside that broader range. Volatility is especially possible on weeks such as this where markets will be closed a day and a half for the Thanksgiving holiday.
Reminder: While all mortgage lenders
will be closed on Thursday, some will also remain closed on Friday. If you're considering locking a loan this week, you should check with your lender to determine whether or not they will be accepting locks on Friday, assuming you don't decide to lock before then.
Loan Originator Perspectives
"Monday I said we'd be floating refinance loans into Monday 11/26 unless
rates dropped materially. Today rates opened materially better for
certain client profiles, which was unexpected since key MBS coupons
lenders use to price rates have generally dropped in price since
yesterday (normally, rates rise when MBS prices drop and vice versa).
This means some investors opened the day with better rates (despite MBS
market signals) to generate pre-holiday lock volume, and we took the
opportunity to lock rates on client profiles that did improve over
yesterday. As for purchases, we also locked rates today for buyers who
got into contract to buy homes over last weekend. Buyers still shopping
for homes should also note that this is the time of year when you can
get the best deals because competing buyers are distracted by holidays
and sellers get jittery. Just remember: if you get into contract to buy a
home Wednesday night through Sunday, you'll have to wait to lock your
rate until Monday 11/26 because banks will be closed. " -Julian Hebron, Branch Manager, RPM Mortgage.
"The risk/reward to floating has been very well illustrated over the last
month or so. Those who were waiting for rates to go down are still
waiting - with no benefit. With rates just above all time lows, it
doesn't make a lot of sense to bank on rates continuing to fall. Only
with the benefit of hindsight will we all know what the true bottom
is/was." -Brett Boyke, Senior Mortgage Banker, Wintrust Mortgage.
"First and foremost, Happy Thanksgiving to all. On the rate front, we've
seen predicable volatility as the fiscal cliff uncertainty commands
attention. After yesterday's stock rally, it's quite possible that any
resolution (even if it's kicking the can AGAIN) could lead to higher
rates. Don't see huge swings in the works regardless, but if you like
the rates today, START YOUR LOAN and/or lock the rate while the getting
is good so you can get the ball rolling." -Ted Rood, Senior Originator, Wintrust Mortgage.
Today's Best-Execution Rates
- 30YR FIXED -3.375%
- FHA/VA - 3.25% (varies more between lenders than conventional 30yr
- 15 YEAR FIXED - 2.875% - 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
- 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
- (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).