rates moved relentlessly higher for the fourth straight day on Thursday, bringing them close to the seven month highs last seen in mid-February. This comes as the result of some of the big-ticket market moving events markets have been waiting for this week, particularly the European Central Bank President's press conference as well as stronger than expected Jobless Claims data. Best-Execution for 30yr Fixed, Conventional loans is once again edging up to levels where 3.75% becomes a consideration though 3.625% remains more prevalent.
(What is A Best-Execution Mortgage Rate?)
When this morning's Jobless Claims numbers showed fewer Americans filed for first-time unemployment benefits than expected, interest rates in the secondary market moved higher, along with equities. The basic philosophy is that a stronger labor market signifies a stronger economy that can support higher stocks prices and interest rates. But Thursday's "Jobless Claims" report is only a minor consideration compared to tomorrow's Employment Situation Report. To whatever extent it, too, shows a stronger-than-expected labor market, rates may continue to rise. Of course, there's also the potential for the data to "miss" its consensus estimates, but the important thing is that whether it misses or beats, it has a lot of market moving potential.
Loan Originator Perspectives
"We lost ground again today, and broke important support points as well,
which could indicate more pending pain. Until sentiment changes, looks
like we're headed towards higher rates. I gave a client a rate quote
yesterday (telling him that rates were headed upward), and when he
called back today, we'd lost $1000 in pricing for his loan. Bottom
line: if you get a rate quote, be aware that it could be obsolete
within a short period of time!" -Ted Rood, Senior Originator, Wintrsut Mortgage.
"Way too much risk coming our way to float. ADP was better than
expected and NFP report could be as well. Until some event causes a
flight to safety, floating is dangerous. Will the stock market take a
breather at some point? Maybe and that will help bonds some. One word will sum it up nicely and no further comment needed. "LOCK" -Mike Owens, Partner, Horizon Financial Inc.
Today's Best-Execution Rates
- 30YR FIXED - 3.625%
- FHA/VA - 3.25% - 3.5% (varies more between lenders than conventional 30yr
- 15 YEAR FIXED - 2.875%- 3.00%
- 5 YEAR ARMS - 2.625-3.25% depending on the lender
Ongoing Lock/Float Considerations
- Rates have risen moderately but consistently since hitting their all-time lows in September and October 2012.
- Regardless of global or domestic economic weakness, the subsiding fear of a disorderly EU breakup will continue to prevent rates from getting back to those lows.
- This is very likely to be the case unless a similarly panic-inducing event were to come into focus, or if a disorderly break-up regained the spotlight.
- Sequestration, negative growth, and generally choppy political and economic environments around the world DO NOT constitute that sort of panic.
- This is a "rising rate environment" until further notice, though pockets of recovery and consolidation can provide smaller-scale opportunities against the larger-scale backdrop.
- (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).