rates were completely unchanged on Friday standing in stark contrast to Thursday's sharp move higher. While there were several lenders whose rate sheets were marginally changed vs yesterday's, most were strikingly similar. A handful of lenders issued positive reprices in the afternoon, but Thursday's damage was done and Best-Execution on 30yr Fixed, Conventional loans remained at 3.5%.
(Read More:What is A Best-Execution Mortgage Rate?)
It's worth mentioning that trading levels in the MBS market ("mortgage backed securities" that most directly influence rates) improved today. This is what allowed for the positive rate sheet changes from some lenders in the afternoon. Still, we'd typically see more broad-based improvement from the previous day when underlying markets improve. The fact that we aren't seeing that may have something to do with yesterday's volatility as well as the tendency for lenders to stay defensive with rate sheets ahead of extended weekends. Bond markets and many lenders will be closed on Monday in observance of Martin Luther King Jr. Day.
Loan Originator Perspectives
"Tuesday and Wednesday this week were the first time rates definitively regained the .125% that was lost as January kicked off. Since rates rose to start the year, we'd been readying client files for the next dip and locked that dip for clients on Tuesday and Wednesday (a "ready" file means a client has provided all their updated income and asset documentation and authorized a credit check). Then rates rose .125% again yesterday and we end the week in that higher territory. Rates are still low, but if borrowers received rate quotes for zero-cost refinance options Tuesday and Wednesday but didn't act, those quotes are likely going to get revised higher. We've seen some slight rate improvement as we're moving into Friday afternoon, but still not enough to get us back to mid-week lows. Rate shoppers holding for better be aware: rates are likely to open next week even to slightly higher." -Julian Hebron, Branch Manager, RPM Mortgage
Today's Best-Execution Rates
- 30YR FIXED - 3.5%
- 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 have risen moderately from their all-time lows, making for relatively increased reward for floating at the expense of greater risks of loss.
- Rates could easily move higher or lower, and unscheduled, unexpected events can ultimately have the most say in the direction.
- Near term risks in 2013 include the upcoming debt-ceiling debate in Washington as well as the Fed's policy outlook regarding securities purchases.
- (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).