rates continued higher on Thursday following stronger-than-expected economic data and continuing the losses after yesterday's FOMC announcement. There continues to be more stratification between lenders' rate offerings than normal. Some rate sheets are marginally better than yesterday's latest while a few big lenders are significantly worse. On average, rates are at their highest levels of the month today and Best-Execution is back up to 3.375% for a majority of lenders.
More:What is A Best-Execution Mortgage Rate?)
Factoring out declines in Gasoline, this morning's Retail Sales report was stronger than expected and Jobless Claims were lower-than-expected. In general, stronger economic data tends to put pressure on interest rates to rise, though is certainly not the only factor. This morning's data added to negative momentum already in place after yesterday's FOMC Announcement and a weak 30yr Treasury Auction in the afternoon helped reinforce the morning's weakness. Mortgage rates are not based on Treasuries, but they tend to move in the same direction.
Loan Originator Perspectives
"I've been saying all along to lock and it's not been a bad thing. A
few no cost deals are on hold pending a reversal, which I expect to
happen. This is a reminder to get your application in the hands of
your loan officer so they can pull the trigger when the time is right.
I think we'll see rates come back down before year end or right after,
but they will come back. " -Mike Owens, Partner with Horizon Financial, Inc.
"Rates have been more unsettled since yesterday's Fed announcement,
especially when combined with growing fiscal cliff uncertainty. Locked
several yesterday and glad we did. The current chart shows we haven't
broken long term pricing support, but we're trending higher. Hard to
get excited about floating at this point, looks more like gambling than
anything else!" -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).