Mortgage rates were steady for some lenders today, and slightly lower for others. The movement wasn't nearly enough to affect rates themselves, meaning the improvement was limited to the closing cost side of the equation. In other words, you'd likely be quoted the same rate today as you would have most of last week, but the upfront costs might be slightly lower. 4.125% remains the most common quote for top tier scenarios in terms of conforming 30yr fixed loans. 4.25% is still prevalent for less-than-perfect scenarios.
The markets that underlie mortgage rate movement were uninspired today. Rates in the US continue to be generally weighed down by rates in the EU as investors still see the European Central Bank as more likely to expand accommodative policy. This also removes some of the traditional connection that rates have with the various economic reports that are released each week. That said, those reports can still make for short-term volatility. The next major opportunity for such volatility is coming up on Thursday when the next revision of 2nd quarter GDP is released.
Loan Originator Perspective
"Rates were slightly lower today but still stuck in the same range they
have been for months. Floating day to day makes the most sense when in a
sideways market like we are currently experiencing. " -Manny Gomes, Branch Manager, Norcom Mortgage
"I'll continue to say lock until we see a strong move lower. My gut
(hope) says that a move lower will happen, but you have to make
decisions based on the highest probability and at date, higher rates
seem the highest likelihood." -Brent Borcherding, brentborcherding.com
"If you floated over the weekend, you were met this morning with slightly
better lender pricing thanks to falling yields in Europe and weak
economic data here and abroad. We are in the middle of the recent
range which would encourage me to lock loans closing within 10 days and
floating everything else. With MBS at the highs of the day, 2:30est, if
you plan to lock today hold off until later. A reprice for the better
is not a certainty, but not out of the question." -Victor Burek, Open Mortgage
"A rather sedate Monday in rate markets today. There's limited
significant economic data this week, and we're still well within recent
ranges. Geopolitical drama may influence us as much as anything. The
long term trend downward is still intact, big question is when (not if)
we'll break it. Lock/float discussion may tilt to float for borrowers
with time on their side. Close to closing, risk averse, or can't afford
possibility of a higher rate? Might to time to lock up the gains and
be done." -Ted Rood, Senior Mortgage Planner, tedroodteam.com
Today's Best-Execution Rates
- 30YR FIXED - 4.125
- FHA/VA - 3.75%
- 15 YEAR FIXED - 3.25%
- 5 YEAR ARMS - 3.0-3.50% depending on the lender
Ongoing Lock/Float Considerations
- The hallmark of 2014 so far has been a disconcertingly narrow range in rates. Too many market participants bet on rates going higher in 2014, and markets have punished that imbalance with a paradoxical move lower.
- As of June, rates were officially lower year-over-year, but that's due to rates' path higher in 2013. The current path in 2014 remains sideways.
- European markets continue to play a nagging role in the background, generally helping rates in the US remain lower than they otherwise might be.
- From a wider point of view, we're in limbo, waiting for the first significant move away from the narrow range. A rally into late May stood a chance to act as this break, but rates have since returned to what were previously the lower limits of the 2014 range.
- As always, please keep in mind that the rates discussed generally refer to what we've termed 'best-execution' (that is, the most frequently quoted, conforming, 30yr fixed rate for top tier borrowers, based not only on the outright price, but also 'bang-for-the-buck.' Generally speaking, our best-execution rate tends to connote no origination or discount points--though this can vary--and tends to predict Freddie Mac's weekly survey with high accuracy. It's safe to assume that our best-ex rate is the more timely and accurate of the two due to Freddie's once-a-week polling method).